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tv   U.S. Senate  CSPAN  May 13, 2010 12:00pm-5:00pm EDT

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internal controls for the following procedures and methodologies and have these attested to by their c.e.o. to the s.e.c. the agency must establish hotlines for whistle-blowers and complaints, retain complaints about the firm's work for regulators to examine. compliance officers must submit annual compliance reports to the s.e.c. they're required to consider credible information they have received from sources other than the issuers in make the ratings rather than relying on the -- basing ratings only on insurers' representations. investors are empowered, the agencies must disclose more about their ratings assumptions, limitations, risks, accuracy and factors that might lead to change in ratings. agencies must disclose their track record of ratings in a way that is -- that is in compliance so that users can compare ratings for accuracy across different agencies. they'll also have the benefit of having new pleading standards so when private suits are brought, they'll be able to have actions
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brought against these rating agencies. the issuer of underwriters -- or underwriters of any asset-backed security to make available any due diligence reports and on and on. the point i want to make is that we have spent a lot of time on this issue. a lost work went into this. my colleague from minnesota has what i think is a very sound and good idea. here are my concerns as the chairman of the committee: i don't know what the implications are. we've had no real examination of having the wheel that my friend from new york talked about. not all rating agencies are equawvment i think there ought to be more of them. i think there are a lot of smaller ones out there that ought to grow in their competency and do things. but there are different companies of different sizes and needs, and to be choosing a rating agency based on an arbitrary chase without considering whether or not the rating agency can actually do the job is my ken. i like the idea because what it does do is get away from a
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conflict of interest. that is, these companies, as it is -- this is a quandary we had. right now the company that seeks the rating agency pays the rating agency. well, obviously on its fairks you've got this prb. if i'm buying the service from you and i'd like to get a triple-a, i've got a pretty good chance of getting it whether i deserve it or not. alternative idea -- why don't you have the buyers of the rating agency? well, a similar problem. they might like to have a triple-d rating to lower the value. so you've got a conflict on either side of this question. that is difficult and difficult to resolve. compound the problem with the fact, the rating agencies, as presently construed prior to our language in this bill, basically rely on the information from the very purchase of the rating agency to determine whether or not it is a good product. there's no due diligence done by the rating agency. so our bill changes all of that in this bill. and so it is with a great deal of reluctance that, as i said,
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my colleague from minnesota, i was prepared to take a good study of this. the s.e.c. has the authority right out in under existing law to deal were conflicts of interest. they have the power to do t whether or not they do do it is another matter. that's always the issue with any regulator. but i just am concerned about what it means. and i say that respectfully to the author. he's worked vied hard on this. there's a lot of good ideas in it. but i'm just uneasy about what the implications could be. and i'd be remiss if i didn't express that as the chairman of the committee that spent hours listening to this debate back and forth as to how we do do this. the amendment from our colleague from florida -- there is a different set of issues that i have, but i also have to express my opposition to that amendment of and the reason there is because very simply we know that credit ratings are far from the perfect measure. i know that. we've wrestled with this. and i agree that the markets may
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place too much reliance on credit ratings. but the way to address the problem is not to simply repeal the safety and soundness provisions of the law. that's what he's asking us to do. so while i've got problems with the present system, and we've made major inroads here in how to address that and the ways that we thought made some sense, the senator from florida's idea is that because we're not happy with the present structure -- although i think our bill before us here does an awful lot in its 40 pages to deal with how this ought to be accomplished -- goes and basically repeals all of it. well, again, you may have a better idea out there, but to get rid of what we have, leaving a vacant space, in a sense, is not in my view, the way this ought tobacco addressed. -- this ought to be addressed. congress should not simply repeal safety and soundness laws without prior study of the impact on our amendments. that's what we're doing with the lemieux amendment. our bill sets out a way in which
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overall reliance on these rating agencies cannot putting undue risk on the financial system. that's my concern. scraping everything out of safety and soundness does not get you safety and soundness. so both amendments, i say with a great deal of -- in fact, i'm more attracted to the amendment offered by senator franken in that i like the idea of where it's going. i just don't know whether or not it's sound. and again it is the kind of thing that i'd like to see examined and that's not to suggest he hasn't done that. but when you take the kind of time and go through the process. so, madam president, it is -- it is with some reluctance that i express my opposition to both amendments and urge my colleagues to review, if they care to the 40 pages of effort we made in our bill -- and jack reed of rhode island deserves a lot of credit for having worked particularly hard on the rating agency issue in our committee and subcommittee dealing with securities. we think a strong bill in these
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areas wil -- i'll be the last to says it's perfect. we did our best to find a way to get far better accountability and responsibility out of the -- out of the credit rating agencies. there's just a great concern here that accountability and responsibility needs to be taken into consideration. i said, our bill has 40 pages of safeguards to strengthen the s.e.c., empower investors, and to make rating agencies far more accountable and responsible. with that, madam president, i yield the floor. ms. snowe: madam president? the presiding officer: the senator from maine. ms. snowe: thank you, madam president. i rise to speak today on amendment number 3883, which is now pending, that i had introduced with my friend and colleague from arkansas, senator
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pryor, and i also ask unanimous consent that senator pryor be able to follow my remarks. the presiding officer: without objection. ms. snowe: thank you, madam president. mr. levin: will the senator yield? ms. snowe: i would be glad to. mr. levin: about how long with the senator be taking? ms. snowe: about 15 minutes. mr. levin: how about senator pryor? ms. snowe: maybe five. mr. levin: thank you. ms. snowe: madam president, the amendment that i have introduced -- and we have cosponsors, senator graham and senator menendez as well -- would ensure that small business regulations are considered in the process by the bureau of consumer financial protection. i'd like to thank my good friend and the distinguished chairman of the banking committee, senator dodd, for diligently working with me in a series of amendments that have been accepted to this legislation that's very critical, to provide small businesses with the
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certainty assurances that they require, certainly not be regulated by this bureau to the degree that they're not involved in financial products. the more atenniv attentive we're better that small businesses will be in their ability to create jobs and to survive what is a very difficult and tragic economic environment. madam president, this amendment would ensure that when the newly created bureau promulgates rules and regulations that it fully considers the economic impact that those rules and regulations would impose on our nation's more than 30 million businesses who have created 64% of of all new jobs over the past 15 years and no question will drive our nation's economic recovery and indeed we're depending on small businesses to lead us out of this jobless recovery. and, you know, a jobless recovery is in the a true recovery.
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we have more than 15 million americans who are unemployed or underemployed, and clearly it is going to be small businesses that pave the way towards employment. plain and simple, onerous regulations are crushing the entrepreneurial spirit of america's small businesses. in 2009 alone there were close to 70,000 pages in the "federal register" and the annual cost of federal regulations now totals more than $1.1 trillion. furthermore, according to the research by the small business administration's office of advocacy, small firms -- and this is no price -- bear disproportionate burden, paying approximately 45% more per employee in annual regulation compliance than larger firms. so the amendment that we're offering here today would ensure small business fairness and regulatory transparency by first drgt the consumer financial protection bureau as a covered agency under the regulatory flexibility act. so that small business review
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panel provisions would apply to the burse rule making. these -- to the bureau's rule making. these small business panels currently apply to e.p.a. and osha and have been extremely helpful to shape more workable regulations at these agencies for small businesses across america. since 1996, when these small business panel provisions were passed unanimously here in the united states senate, signed into law by then-president clinton, the e.p.a. has convened 35 panels and osha has convened nine panels. the findings have helped e.p.a. and osha improve the draft proposals by tailoring regulatory approaches to the unique situations of small businesses. i know there are some that'll argue that my amendment will undermine the rule making capacity of the bureau. but, madam president, this simply is not the case. according to the s.b.a. office of advocacy report -- and i quote -- "the panel process does
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not replace but enhances the regular notice and comment process." end quote. the office of advocacy has also found that these small business review panels have facilitated "revisions or a adjustments to be made to an agency draft rule that mitigated its potentially adverse effects on small entities but did not compromise ththe rule's public policy objective." others have expressed concern that these small business advocacy review panels should not apply to the bureau because they applied to no other financial regulatory authority. unfortunately, there is continued frustration by the leaders of the small business community toward government agency and the one-size-fits-all regulation. independent agencies like the securities and exchange commission, the s.e.c., in its approach to regulation under sarbanes oxley and the federal communication commission, the f.c.c., and its raoul making
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governing telecommunication telecommunications practices are often cited for failing to recognize their impact on small businesses. this is why it is vital to small business requirements apply to the new independent agency that is created and the underlying legislation -- in the underlying legislation. still others will argue that our amendment is unnecessary because my earlier amendment provides an exemption for small businesses from the regulatory requirements of the bureau. however, we must go further to ensure that rules that the bureau promulgates does not unintentionally impact small firms' job-creation capacity. that's why our amendment would also specify during the rule-making process, the bureau must consider the economic effects that its rule would have on the cost of credit for small businesses. now, according to a recent ffib survey -- that's the foremost organization that speaks for small businesses -- 42% of small
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business owners use a personal credit card for business purposes. so it's imperative that small business interests are fully considered when the bureau issues regulation on consumer credit cards, so that however well-intentioned the bureau does not inadvertently cut off vital small business credit sources, especially during these tenuous economic times when a recent federal deposit insurance corporation survey noted that banks posted their sharpest decline in lending since 1942, and that's a big issue, madam president, right now because lending is not occurring to small businesses. it's one of the issues that we must address in any small business tax relief package and those discussions are ongoing right now with treasury and the administrator of the small business administration karen mills, with chairman landrieu of the small business committee, myself, the finance committee, the leadership of both the democratic and republican side, because it is so critical.
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and if we can't get access to lending for small businesses, just cannot be created. so we don't want to compound the problem with creation of this bureau that ignores the implications when it comes to access to credit for small businesses. after all, all the entities under this legislation, even the smaller financial institutions, all the entities will be covered under this bureau with respect to regulations. we want to make sure that the smaller financial institutions' voices are heard because they're the ones that primarily provide access to credit for small businesses, not to mention of course the credit card companies, who also will certainly be regulated under this bill. we want to make sure that we're not just having the big institutions' voices heard but not the small financial institutions and not how it'll affect small businesses throughout the country. just to given an understanding, madam president, how strongly regarded and supported this legislation is, we have a
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brought cross-section of stakeholders that support this amendment. more than 23 organizations that represent millions and millions of small business owners. and i'm going to list them because it's so important, given the support that they are providing this amendment and how critical they think it is to the functioning of this bureau and being cognizant of the regulations that are issued that does not adversely affect the well-being of small businesses during these tumultuous economic times. you have the sorks of builders and -- the association of builders and contractors, the hart patio and barbeque association, hispanic leadership fund, the independent electrical contractors, the institute for liberty, international franchise association, the national association for self-employed, the national federation of independent business, the national lumber and building material dealers association, the national restaurant association, the national
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roofers contracting association, the national small business association, the printing industries of america, the s corporation association, small business and entrepreneurialship council, the society of american floorers, the society of chemical manufacturers and affiliates, the tire industry association, the u.s. chamber of commerce, the united states black chamber, the united states hispanic chamber of commerce and the women impacting public policy. as you can see, madam president, a broad array of stakeholders are so concerned about the pending legislation with respect to this bureau that they support this amendment. these groups have sent a letter as well to both the chair and the ranking member of the banking committee as well as the majority and minority leadership because they are so concerned about the underlying legislation, the creation of this consumer financial protection bureau and how it will affect small businesses, and i quote from their letter. it says it is an effort to prevent unintended consequences
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by a new agency that could harm the small business sector and provides assurances that small business access to credit is a top consideration by bureau officials as they take on the important task of overseeing our financial sector, end quote. madam president, you know, just to give you, i think, another indication of how supportive and how important these advisory panels are, the ones that would be created in order to review the regulations that would be issued by this bureau, this would be before they issue the proposed rule. that these panels, these advisory panels would be created, as has occurred under e.p.a. and as well as osha since 1996. in fact, i should mention just, for example, to give you an illustration of the rules that have been reviewed to these advisory panels that have been created within a 60-day period,
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i might add, 60 days. they would be required to report to the bureau on their assessment of any particular rule before they propose and issue that rule so we can understand the ramifications. but, you know, for example, under e.p.a., they had rules issued that created an advisory panel on groundwater, radon and drinking water, arsenic and drinking water, diesel fuel requirements. just to give you an illustration, we have tuberculosis, and the list goes on. since 1996, these advisory panels as the s.b.a. office of advocacy has indicated in their materials provides extremely valuable information on -- on the real-world impact. and that's important to understand here, the real-world impact. the effects of what happens out there in the real world when small business has to digest and to live by and to implement any rules or regulation issued by
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this bureau, and the compliance costs of these agency proposals. so clearly this will have enormous benefits to small businesses because we have a chance to review in advance through these advisory panels that would be compromised of the rule-making agency. in this instance, it would be the bureau, the consumer financial protection bureau, representatives of small business community as well as the office of management and budget information and regulatory affairs. so there would be a broad away to examine these rules before they are proposed for the rule-making process. doesn't that make sense? isn't it important to understand the ramifications before we issue these regulations that would have adverse consequences for small businesses as they attempt to survive during these tough times? now, the s.b.a. office of advocacy has indicated in their materials with respect to how these panels work -- and again,
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i said it takes 60 days. they are required under law by 60 days to make a proposal to the bureau in terms of the ramifications or the effects or other considerations that ought to be incorporated as they issue their proposed rule. the purpose of the panel process is threefold, and i'm quoting from the s.b.a. office of advocacy. first the panel process ensures that small entities would be affected -- that would be affected by a regulatory proposal consulted about the pending action and offered an opportunity to provide information on its potential effect. secondly, a panel can develop, consider and recommend less burdensome alternatives to a regulatory proposal when warranted. finally, the rule-making agency has the benefit of input from both real-world small entities and the panel's report and analysis prior to publication. doesn't it make sense? it saves everybody a lot of
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aggravation, a lot of money, a lot of energy that would have to be devoted in the rule-making process. after they issue the proposal rather than before they issue the proposal for the rule-making process. it clearly does make sense, madam president, and that's why it has worked so well the e.p.a. and osha, and that's why it works well under these circumstances and most especially during these times when we're creating this bureau that will have wide-ranging effect on financial institutions all across this country that ultimately in -- will affect the more than 30 million small businesses because more than 42% of them depend on credit cards for credit. and we want to make sure that we're considering the consequences of anything that is done. also, the downstream effect of bank regulations would be considered, you know, as well as
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a potential effect of a regulation by this bureau. you know, when banking practices are restricted, they do not just affect consumers. they also affect small businesses, higher capital requirements tighten the availability of credit for small businesses. that's another example of a potential rule that would come out of this bureau that could directly affect small businesses. so it's not only consumers, it's also small businesses. the regulation of angel investors, a very important issue. in fact, nfib has written on this question because there will be subsequent amendments to address this issue as well. but, you know, the rec of -- the regulation of angel investors also affects the economic well-being of small businesses because of the use and the source of capital. i know nfib is concerned about the reduced pool as they have indicated in their letter with respect to angel investors, and many small businesses depend on these individuals who invest to provide the kind of start-up
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capital in their businesses. there is other significant small entities in the financial products industry who are likely to be overlooked in the bureau's rule-making process. the panel requirement will benefit these businesses and will benefit the bureau's consideration of how their rules should be tailored to minimize impact on these businesses while maximizing the intended benefits overall for small businesses. madam president, this is not anything unique to what we don't already know about how important the regulatory flexibility act is overall. every agency is required to consider the effect of any rule of law and how it's going to have implications on small businesses. and in two instances, in two agencies, e.p.a. and osha is required to establish advisory panels when it's determined the rules are going to be issued that could have a consequence in small businesses, and that gives
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them the opportunity to have input into the process before this bureau issues those rules. i think it makes a great deal of sense. it's reasonable. it's logical. it averts any unintended consequences in the onset of the process rather than wait to go see how it takes effect, and then we discover that in fact it depresses the ability of small businesses to create jobs or to survive. so, madam president, i hope that we could get very strong support for this legislation. i'm very appreciative of the work of my colleague, senator pryor, with whom i work on the small business committee. he does a great job and has provided a great deal of input into the drafting of this legislation, and i appreciate his leadership. i appreciate the fact that it's done on a bipartisan basis because i think we all recognize the pivotal role that small business plays in today's economy and we'll certainly depend on playing a critical
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role in the future. madam president, i yield the floor and i also yield to the senator from arkansas. mr. pryor: thank you, madam president. the presiding officer: the senator from arkansas. mr. pryor: madam president, i want to thank my colleague from the state of maine. she has been a great leader in small business matters and she and i serve on the small business committee together, and we have been working for, i guess, three years now on the regulatory flexibility act and other related efforts to try to make sure that the proper environment executives in america for small businesses to thrive and for entrepreneurs to be successful. this amendment would make that key provisions of the regulatory flexibility act which require that federal agencies fully consider during the rule-making process the economic impact on small firms. it would make sure that those provisions would apply to the cfpb created in the bill offered
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by senator dodd. this amendment would ensure that the newly created cfpb when it's promulgating its rules and its regulation fully considers the economic impact those rules and regs would impose on our nation's almost 30 million small firms who have created 64% of all the new jobs in this country over the last 15 years and undoubtedly will drive this nation's economic recovery. and really, the last point i wanted to make before i just make a few closing comments is there is a fact out there that we as the senate and as the congress -- as the house should be aware of and we should address, and that is owner us -- onerous regulations can crush entrepreneurial spirit for america's small businesses. in 2009 alone, last year, during a recession, they were close to
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70,000 -- there were close to 70,000 pages added to the federal register of new regulations. and the annual cost of complying with federal regulations totals about $1.1 trillion. i'm not saying we should end all regulation. i think most of these or at least a lot of these make a lot of sense and there is good reason for a lot of them. we just have to be careful. we have to understand the impact that these regulations have on small businesses. we want our small businesses to thrive. we want our small businesses to be successful, and if we're not careful, an agency like the cfpb or there are many other federal agencies can create rules and regulations that actually choke off business opportunities for entrepreneurs and for small businesses, so i'm proud to join my friend and colleague from maine on this amendment and i would encourage other colleagues to look at this amendment and
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look at the text of this amendment, and i just have enjoyed working with her over the last few years when it comes to trying to help small businesses. so with that, madam president, i yield the floor. mr. levin: madam president, i come to the floor to support the amendment that senator franken, amendment numbered 3808 and his cosponsors. this will address a major unresolved cause of the financial meltdown. a cause which this amendment focuses on is the flawed and inaccurate credit ratings labeled poor quality mortgage-backed securities and high-risk collateralized debt obligations as aaa investments. aaa means that they were on par in view of these rating agencies with u.s. treasuries. investors from pension funds to
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universities, municipalities, insurance companies and more lost hundreds of billions of dollars in part because of these ratings. now, how did the credit rating agencies get it so wrong? a big part of the answer, one that would be remedied by the franken amendment, is the inherent conflict of interest that now permeates the credit rating industry. i'm just going to read from a few emails here that we uncovered, disclosed at our hearing. we had long hearings. we have been investigating this economic meltdown that we had, financial meltdown for about a year and a half. one of the four hearings we had was looking at the credit rating agencies, looking at standard and poor's, looking at moody's, looking through their documents which we subpoenaed by the -- literally by the millions. now, listen to some of these emails. we want to focus on what this conflict of interest is. you want to get a feel for how it is that the credit rating
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agencies are being paid by the very people whose ffnl instruments they are doing the ratings of -- whose financial instruments they are doing the ratings of. listen to just a few of these emails which we got. one standard and poor's analyst wrote that a ratings model that could have been released months before wasn't because, quote -- "we had to massage the subprime numbers." we had to massage the subprime numbers to preserve market share. so now you have got inside standard and poor's, their analysts saying we had to massage our numbers here on this financial document. why? not because the rating required it, the merits required it, but because in order to preserve their market share, they were massaging the subprime numbers. here's an e-mail from a u.b.s. banker wandering standard & poor's not to make it hard --
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warning standard & poor's not to make it hard to her get high credit ratings. quote -- now, this is a u.b.s. banker talking to the credit rating agency. quote -- "heard you guys are revising your residential mortgage-backed security rating methodology. heard your ratings could be five notches back of moody's equivalent. this is going to kill your residential business. it may force us" -- u.b.s. -- "to do moody-fitch only c.d.o.'s." now, the standard & poor's manager who received the e-mail asked a colleague -- quote -- "any truth to this?" the response -- quote -- "we put out some criteria a couple weeks ago that we will begin to use for deals closing in july. we certainly did not intend to do anything to bump us off a significant amount of deals." they're worried about their deals.
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they're worried about their bottom line. the country worries about whether those aaa ratings are real or not. here's another example. called vertical a.b.s. a major bank asks standard & poor's and moody's to rate one of these financial instruments. the bank refused to cooperate with the analysts so the bank is not working with the analysts at standard & poor's and moody's to rate a c.d.o. one analyst now is complaining to another inside of this credit rating agency -- quote -- "don't see why we have to tolerate lack of cooperation. deals likely not to perform." "deals likely not to perform," one analyst inside to another. that's exhibit 94b, by the way, anyone wants to look it up. now, despite the analysts' judgment that that financial instrument, that c.d.o., was unlikely to perform, both
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moody's and standard & poor's rated it, giving aaa rating to the four top levels of that particular c.d.o. what happened? six months later both agencies downgraded that financial instrument and it later collapsed. now, there's a lot more examples here and i know the leader is trying to get on with votes and so what i'll do is ask unanimous consent to put the balance of my statement in the record in 20 seconds, but i just want to alert colleagues that our hearings, based on a year and a half investigation, looked at one of the major causes of this collapse. and one of the major causes was because our credit rating agencies were interested in their bottom lines instead of getting accurate ratings for the financial instruments which our universities, our pension funds were buying. the franken amendment corrects it, it requires that this conflict of interest be ended. it doesn't just study it, it
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requires an end to the conflict of interest by allowing the securities and exchange commission to identify an independent intermediary who will put a process in place to end this conflict of interest. i commend senator franken for his amendment, ask unanimous consent that the balance of my statement be inserted in the record, and i yield the floor. the presiding officer: without objection. the majority leader. [inaudible] mr. reid: i appreciate the work of the permanent subcommittee on investigations. they've done remarkably good work. madam president, i ask unanimous consent the senate now proceed to vote in the relation to the following amendments in the order listed, that no amendments be in order to any of the amendments covered in this agreement. franken, 3991, lemieux, 3774, as modified, as a side-by-side to 3991; provided furthered that after the first -- further that
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after the first vote in the sequence be limited to ten minutes, that there be two minutes divided equally and controlled prior to the second votes. following the votes, senator kaufman be recognized for five minutes. that at the conclusion of thinks remarks, the senate stand in resincere until 2:00 p.m., that at 2:00 p.m. there be 15 minutes of morning business in which senators be allowed to speak on s. 3305 and make a unanimous consent request on the subject. that immediately thereafter, the senate resume s. 3217, there be five minutes of debate in order to the sessions amendment number 3832, with the time equally divided and controlled in the usual form. that upon the use or yielding back of time, the senate proceed to vote in relation to the sessions amendment. the presiding officer: is there objection? without objection, so ordered. mr. reid: madam president, i ask unanimous consent that there -- there are six committees that meet during today's session. they have the approval of both the majority and the minority. i ask consent these requests be agreed to and that these requests be printed in the
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record. the presiding officer: without objection. under the previous order, the question is on the franken amendment. is there a sufficient second? there appears to be. the clerk will call the roll. vote:
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the presiding officer: are there any senators in the chamber wishing to vote or change their vote? if not, the yeas are 64, the nays are 35. the amendment is agreed to. a senator: madam president? the presiding officer: may we have order in the chamber? the senator from massachusetts. a senator: madam president, may we have order? the presiding officer: senators please take or conversations out of the chamber. mr. kerry: as colleagues know, we are currently being visited in washington by the president of afghanistan, had a mad -- hamad karzai. he has just been here in the senate engaged in a luncheon with senators. i would like to ask unanimous consent that the president of afghanistan, hamad karzai, be
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permitted the privileges of coming on the floor to be greeted by the members of the united states senate together with his ministers who are here for a series of important meetings. the presiding officer: without objection. the presiding officer: under the previous order, there will be two minutes of debate equally divided under the lemieux amendment numbered 3774. who yields time? the presiding officer: the senator from florida. may we have order in the chamber, please?
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a senator: madam president? could we have order, madam president? mr. lemieux: this chamber just supported and voted for the franken amendment. my measure goes further. my measure says we are going to write these rating agencies out of law. we should not reward bad behavior. there are other ways to determine creditworthiness. there is a two-year period to figure that out. this is not -- this is the better way to do this. it will solve this problem. these rating agencies were responsible for this debacle. madam president, mr. president, i'd like to give the remainder of my time to my colleague, senator cantwell. ms. cantwell: thank you, mr. president. the presiding officer: will the senate be in order, please. the senate will be in order. the senator from washington is recognized. ms. cantwell: thank you, mr. president. this is language that was also offered in the house bill by our colleague, barney frank, and it's appropriate that we don't
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require our federal agencies to just rely on these rating agencies. it's critical that these agencies like the fdic and the comptroller of the currency use their discretion to come up with appropriate standards of creditworthiness and not rely on the monopoly of the rating agencies. so i hope my colleagues will support this amendment. the presiding officer: who yields time in opposition? mr. dodd: briefly, my concern with this amendment is we're replacing it without having anything in its place. very simply, that's my concern with it. i urge my colleagues to vote no and yield back my time. the presiding officer: the question is on the amendment. there appears to be a sufficient second. the clerk will call the roll.
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the presiding officer: are there any senators wish to go vote or to change their votes? if not, the ayes are 61, the nays are 38. the amendment as modified is agreed to. the presiding officer: the senator from delaware is recognized. mr. kaufman: mr. president, i
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rise today to mark national stuttering awareness week. most of us take for granted the ability to speak comfortably and fluently. all we have to do is think of words and they come out clearly. introducing ourselves at meetings, holding conversations over the phone, ordering meals in restaurants, all of these are situations avoided by many people who stutter as a result of being self-conscious. mr. president, approximately 3 million americans stutter. since president ronald reagan's proclamation in 1988 the second week in may has been observed as national stuttering awareness week. it provides an opportunity for all of us -- for all of us -- to learn more about stuttering and ways to help those who stutter. we've all encountered people who stutter.
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contrary to popular misconception, stuttering is not a result of nervousness or of emotional problems. it is not the fault of those who do it or of their families and friends. stuttering is a speech disorder that is neurological and physiological. the cause to this day remains unknown, but a recent study indicates the likelihood is stuttering may probably be genetic. while there's currently no cure, there are many, many treatment options available. children usually begin stuttering between the ages of 2 and 5, and parents should not wait to seek treatment from a doctor or speech language pathologist. early therapies have been shown to help reduce stuttering. those who continue to stutter into adulthood often face social and economic difficulties. unfortunately, according to a
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2009 study by the national stuttering association, 40% -- 40% -- of adults and teenagers who stutter said they were denied a job or denied a promotion or denied a school opportunity as a result. furthermore, eight out of ten children who stutter have reported being bullied and teased. i'm not just speaking about stuttering today because it's an important issue for so many americans and i'm not speaking about it because my friend and predecessor, joe by determination the vice president, has shared his stor story -- joe biden, the vice president, has shared his story of overcoming stuttering. this is a personal issue for me, because stuttering runs in my wife's family and i've been around people who stutter for many, many years. when my wife lynn was a child, her parents took her to a therapist for her stuttering who recommendedimmobilizing her right arm with a solid tube. at that time, the theory was
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that if she was forced to learn to write using her left hand instead of her right, she could somehow be distracted from her stuttering. suffice it to say, the tube didn't work. she is just one example of what stutterers have historically had to endure. thankfully today, there are great treatment options available from licensed professionals. i am glad, very, very glad, that there are great organizations, like the national stuttering association and others, that are raising awareness of this important issue. there are important steps all of us can take to help those who stutter feel more confident and comfortably speaking. i hope people, i hope people will go out and learn more about what they can do themselves, especially if they know someone who stutters. in recognition of national stuttering awareness week, i am introducing a resolution to mark this observation. i am proud to say that i'm joined by 27 of my colleagues in
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sponsoring this resolution, supporting the goals and ideals of national stuttering awareness week 2010, and i thank them for their support. they include senators barrasso, sherrod brown, burris, cardin, carper, cantwell, casey, cornyn, durbin, enzi, gregg, hague en, isakson, lemieux, levin, mikulski, prior, reid, risch, sessions, shaheen, snowe, tester, warner, whitehouse, and tom udall. mr. president, i ask unanimous consent that the senator proceed to the immediate consideration of s. res. 524, submitted earlier today. the presiding officer: the clerk will report. the clerk: senate resolution 5 524, supporting the goals and ideals of national stuttering awareness week 2010. the presiding officer: is there any objection in proceeding to the measure? without objection, so ordered.
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mr. kaufman kaufman: mr. presidi ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table with no intervening action or debate, and that any statements related to the resolution be placed in the record at the appropriate place as if read. the presiding officer: without objection, so ordered. mr. kaufman: thank you, mr. president. i yield the floor. the presiding officer: urn the previous order, the senate will stand in recess until 2:00 p.m.
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>> supreme court nominee elena kagan is meeting with senators in advance of her confirmation hearing. learn more about the process and nation's highest court in c-span's latest book, the supreme court, pages of candid conversation with all the justices active and retired
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>> next, house speaker nancy pelosi holds her weekly legislative briefing. topics include u.s. job creation and the 2011 budget. from capitol hill, this is 15 minutes. >> our mantra here, jobs, jobs, jobs, the four-letter word we keep our attention focused on and very pleased with the jobs numbers. increase of 290,000 jobs. 230,000 of them in the private sector. we continue a slew of bills for job creation. we will prepare, our chairman of the ways and means committee, mr. levin, woulding with the chairman of the finance committee, are working on our american jobs and closing tax loophole act which will be ready soon. mr. frank will be marking up legislation to increase credits for small businesses and therefore, job creation.
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we're very pleased with that. we are very pleased with the bill that is on the floor right now that competes act. this is official and personal satisfaction because the innovation agenda is something we started way back when i became leader. went around the country, put together working bipartisan way with leaders in education, and job market, the venture capital community. where we could attract capital to public policy initiatives to keep america number one. so that competitiveness and the centered around energy, health care, reducing those costs to small businesses. the competes act that is on the floor now with the leadership of bart gordon is really a triumph. it is a bill for the future about staying on a path, doubling investments in national science foundation, to focus on energy
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development and the education of our people to have them be able to take advantages of the jobs, the great new clean energy jobs for the future. so i salute chairman gordon for his remarkable leadership. the bill got over 350 votes in the last congress. now it is being reauthorized and we hope that it will get a very strong bipartisan vote as well so we can send it over to the senate in that way. speaking of the senate, as you know, they're focusing on the you wall street reform legislation. we look forward to their finishing that so we can go to conference and send a very clear message, never again will recklessness on wall street cause joblessness of main street. the recklessness of some, not all. we won't paint everyone with the same brush. enough to lose 8 million jobs in our economy. again, joblessness on main street is being people concerned about losing their homes, their jobs, their
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savings, their pensions, what they had saved for their children's education. so, again, points out the difference between where we are, the democrats and the republicans. hopefully they will have a bipartisan bill in the senate and that what's we'll end up at end of the day. but in the house we couldn't get one single vote to reform wall street. we were on the side of the middle class. the republicans were on the side of wall street. same thing with the health care bill. reining in insurance companies, republicans said no to that. again, with their energy initiatives, we were fighting big oil and the republicans resisted that as well. so as we go forward, we're again striving for bipartisanship, but want to be clear what this fight is about. it is about people's interest, and the democrats support that versus the special interests. i want to say a word about health care because some of
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the provisions of it are coming forward now. already in effect is an end to recisions. that you can not be dropped from your policy because you get sick. now you can stay on your parents policy until you're 26. very important. as we approach graduation. small business tax credits are already there to help small businesses to help them provide health insurance for their workers. today, you see in the press the announcements and initiatives that strengthen the hand of the administration to fight fraud and save money for the taxpayer. as we go forward into this year, we will have a assistance to retirees too young for medicare that is unfolding. we start closing the doughnut hole for seniors and we end discrimination of, because of preexisting conditions for children this year.
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and in the new private plans we have free preventative care. as you probably know the temporary high-risk pools is already are in the works. so we're very pleased with the unfolding of the health care bill in the bigger sense. it is about a healthier america. about innovation, prevention. it is about lowering costs and improving quality, and expanding access to many more people. but that wasn't possible to do that without reining in the insurance companies. proudly democrats were willing and ready to do that. again, it is, that bill is a job producer. we'll produce jobs this year but over the life of it, over 10 years, four to five million jobs. so it is all about taking us back to where we started all about job creation. people have said we don't want to see big bills. so we have these discrete bills with small business credits.
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. .
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>> in the past, or compromise which has delayed the bill, by that, i mean the bill that congress passed now that wouldn't take effect until next year. >> we're going to be able to take this one at this time. we have a number of vehicles where people may want to speak out on this. the first one will be the defense authorization bill. the chairman will bring that bill to the floor and make evaluations. >> the public is beginning to ramp up their criticism that it's not looking like you're going to do a budget resolution this year. >> who said that? >> it just doesn't look -- >> oh, i thought you meant the republicans were saying that. [laughter] >> i mean the core job of governing. >> let me say it's going to be how we go forward with leaveing our responsibilities.
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it would be responsible, to use that word. we had a budget last year that called for five year plan on how to reduce the deficit. whatever decisions we make about how we go forward will be the meet the needs of the american people to do so in a way that reduces the deficit. and that it takes us to reach our goals of cutting the deficit in half in five years. >> is there anyway that the house will take another vote on energy and climate legislation? >> we are optimistic about what the senate has introduced. we will see the path it takes in the senate. i think that bill has something that we can come to agreement. if we do, we'll take it up. >> you're willing to cast another vote on climate change. >> they've already gone down that path. i think that every step that we go along the way is one that talks about an array of
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initiatives to reduce dependence on foreign oil which is a national security issue. national security, which is about creating new green jobs from now into the future. but national security and jobs. we must use that and i believe we do and our remembers support anything in creating jobs. i'm just trying to think of the ways, we had a question last time that i cannot remember. >> the current budget, does that reflect difficulties of getting votes? >> no, we're going our work here. we just had a time consuming piece of legislation. the health care bill that came into this year, usually it does not. but there's several ways in which to meet our responsibility in terms of the appropriations
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bill. yes, ma'am? [inaudible] >> i was wondering how serious you think the anti-incumbent and how serious of a threat it is to the majority. >> so two? >> counting senator. >> so it's not just a democratic question. we're talking about senate bennett in utah. i think all of these relate to party politics in the districts. mr. mollohan did not lose to a republican, he lost to a democrat. he made that point. so i think -- as far as policy sense, i assume nothing. i take nothing for granted. and, in fact, i enjoy campaign season as you may have noticed. and all assumptions are false when it comes to politics. i really do. they are all stale in every way
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have to be judged as to what it brings to it. do you have to take into consideration an over arching move, certainly? but we win our races one district at a time. and if there is a disagreement as this is in the hawaii as you -- as you saw in hawaii and west virginia mr. mollohan, there is a primary process to deal with that. i can't speak in terms of the primary in utah. >> as the policy over stated? >> i'm not saying it's over stated, but in our case, one district at a time. don't under estimate the power of such an idea. don't under estimate the strength of your opponent. but don't over estimate it either. >> you made the point
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"washington post" poll said that less than 1/3, national poll, less than 1/3 of the country wants to vote for their member of congress. that was like in 1994. doesn't that say something? in the national sense? what are you going to tell your members when less than 1/3 of the country is planning to vote for the incumbent. >> nothing different than i've told them before. they have to work hard to be the best representative that they can for their district. i have confidence that they are doing that. they have to build it at the grassroots level, get their message as to who they are and what they support in congress and how different they are from their opponent. we hope they have the resources to convey that message. so it is, you know, we've been down these paths before. and it's -- it's no question. at this moment they are in the imdumb bent mode. i have confidence that my members know how to speak and
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communicate with their districts. i wouldn't tell them to do anything less than work as hard as they can, assume nothing, but don't be dragged down by assumptions. [inaudible question] >> well, we look forward -- and i was very pleased to join my leadership colleagues in inviting president calderon to come and we look forward to the message that we will bring. the one of friendship, one of common interest in our hemisphere. and i'm not going to change change -- tell him what his speech should be. i look forward to hearing from him. >> when asked what would you like to hear from him? >> you know what, i want to hear
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what he has to say. [laughter] >> because that is why he's coming. if i knew what -- in other words, if we all agreed on what it was, maybe he wouldn't have to come. he could send us a letter. [laughter] >> but we don't want that. because his coming here is not -- it's about the message that he will deliver. that's for sure. but in over riding message is the friendship between our two countries, the respect that we have because of the demonstrated and addressing some of the critical issues that relate to border security, of course that is important, migration issue which are important, economic developments, fighting terrorism, and it is isn't -- it isn't, you know, he's very creative and that we look forward to how we will frame those questions rather than having a blueprint from what we want to hear from him.
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i respect your question. but him coming is the power of the message he will bring and the manner in which he brings it. thank you all very much. [inaudible conversations] >> the senate is still in recession for the democracy policy meeting. they will return at 2 eastern for the regulation bill. live coverage continues here on c-span2 when members gavel back in. until then, today's pentagon briefing with army general mcchrystal. we'll show you as much of this as we can until the senate returns. >> the bottom line, there's much more work ahead with the afghan security forces. but i've pleased with the process being made. while our strategic priority remaining building the ansf, our operational lies in securing the
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southern part of afghanistan. an area that includes kandahar, and held the economic fault in the insurgency and for afghanistan. 10 months ago, we began a series of operations into the helmand river valley, expanding the afghanistan government influence. there's been consider progress in security and governance. as it is expected in counterinsurgency, progress is often slow and delivered. this reflects the challenge of changing not only the dynamics, but security, governance, and development. but also the attitudes of a population long pressured by insurgencyies. as additional forces go into afghanistan, we will reinforce ongoing efforts to secure kandahar. an environment that's ewe nookly complex and will require a unique solution. this effort is being led by the
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afghans and will focus on the complex, political, and government aspects. i expect several questions about kandahar, but i want to make a point that there will be considerable efforts in other areas of the country as well that i'd be happy to discuss for you. ultimately, our efforts across afghanistan are about changing the per section of people. afghans believe more of what they see than what they hear. this is the process that takes time. we need courage and reresilience. we expect as the combined security forces in the taliban areas. over time, security responsibility will transition to afghans. thank you. i'll take any questions now. >> can you tell us a little bit about the efforts on how the major operations in kandahar to secure local buying and support
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for that operation? the head of the operation about how important that would be. and i know at one time, the plan in kandahar has been able to carry that through. what are you encountering? >> an opportunity to describe what we are doing in kandahar already. we're not using the term operation or major operations because that things to mind in the people's psyche, a dday. kandahar is not controlled by the taliban. it's not a case of having to recapture areas has marsha was. similar to marsha, it's important that we shape the leaders, elders, political economic leaders so that their participation helps shape how we go forward. and also so that clearly we have
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no buy in for the operation. now that has begun -- actually months ago. so when we talk about the reference in kandahar, it's ongoing and it's a process. i went down to see president karzai a few weeks ago for a first a series. in which leaders from not just the city itself but the district around were brought in in a very candid series of meetings over two days. they gave him their feedback. that's one the processes. there are a number of other things that the government of afghanistan is doing to try to shape the power of the governor, the effectiveness of the mayor, capability of the police and we're partnering with them on that, as well as being partnered with security operations which will happen inside the city and in the areas around it. >> the institute for the study of war just came out with a report saying the kandahar
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strike force and other private militias in and around should be disbanded. do you agree with that? and if not, what is the role of these militias in the upcoming mission or operation if you want to call it? >> i think over time that all armed groups in afghanistan should be under the government. the control of the government of afghanistan. both to protect their sovereignty and reflect it. there are private security companies that operate. they have been a necessary requirement in some years past. there have been some other forces as well. but i think increasingly, president karzai is committed to bringing all of those under government control. i personally think that's the right move. >> short term for the kandahar mission, what will be the role of the kandahar strike forcing the other groups? >> i'm not going to discuss any specific forces like that. all of that will reflect president karzai's attempt to move things under government
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control. >> general, there's been a lot of focus in recent months about civilian deaths in afghanistan. i wanted to ask you about the numbers of the u.s. killed and mounded. this numbers have increased drastically at the same time this year as last year. they have doubled. how has this impacted the force and you as their commander? >> this morning, i spent time with president karzai. and walked through part of the cemetery. went into soldiers that had worked directly for me and had been lost. and in iraq and now in afghanistan as well. and president karzai, every single casualty effects people and leaders and it effects families, children, parents, so each one of them is sacred.
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and i think we all know that. the force is strong. the force believes in the cause. the force understands what we are doing is important. casualties are something that the american people will keep in their minds and their hearts. not just the kills. but we also went to walter reed this week and went up and visited wounded. and life-changing wounds also effects the individuals and families as well. before we came over, president karzai and i also went to the bagram medical facilities where we visited afghanistan army forces, police, and civilian casualties as well. it's important that we keep all of that, casualties, are casualties. our afghan partners, our coalition partners of americans and afghan civilians. and they all matter. and i think everybody is committed to the task. let me go through that. >> yes, sir.
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you know, the u.s. government has been investigating possible links between the time square bombing attempt and pakistani. i know it's not in afghanistan, but it's related. can you give us some sense of your view of important the pakistan taliban indeed may have more global reach. this morning there were additional arrests or detentions here in the u.s. of pakistani nationals in massachusetts. if you can, just broadly, how much have you been briefed on this investigation, but also the other bigger question about the pakistani taliban, that if indeed they are connected to these operations, is there nor of a threat to the american homeland than some of the insurgence you're finding in afghanistan? >> i only know some of the intelligence on this. but i think what this does point out is the rise of extremist groups. whether it's ptp or others, they
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all represent to some agree or another that can generate threats outside of the local area that they are. so the degree to which the government of pakistan is focused on bringing to an end the insurgency they face forward from the pakistani taliban. i think this highlights just how important that is. important for them and important for our partnership with them to do that. thanks. >> you have ongoing security situations inside kandahar, and particularly the wave of as the nation their and are you concerned that the fear that's spread, it's going to prevent you from, you know, reaching out to the population there and gaining their trust. >> it went from doing that. but i think it highlights the importance of doing that. many insurgencies use targeted
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assassinations as a way to intimidate the population and undercut the ability of the government to establish effective mechanisms. that's what i think we are seeing here. certainly, some of those murders maybe criminally related. but there is a clear insurgent threat to the primary part of this. i think it's key that we see just how dangerous of a threat that is to the government of afghanistan and to kandahar and highlights the importance of us establishing security inside the city and around it. >> i'm sorry, have the police starting providing there? >> we have already had a number of u.s. military police partnered with the afghan police, that is increasing in the months ahead. >> i'm going to ask you about the peace treaty that's coming up later this month. what are your expectations for it and can you talk more broadly about what role the
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reconciliation will play in this conflict? >> i think it is an opportunity for the government of afghanistan and more widely the people of afghanistan to come together and discuss the way forward. i think that necessarily and appropriately included how they will end this conflict, the resolution of peace. and reintegration, i think reconciliation will be discussed, i think they will try to come out with -- as a result of extensive discussions with the sense of consensus, a sense of the sense of afghans. and i believe that puts president karzai in a position where we understands and can have an opportunity to lay out his case in front of the people of afghanistan, the direction that he thinks things need to go. i think more widely reconciliation is an afghan process that they are doing an awful lot of thinking about.
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i think it's appropriate effort on their part to figure out the way ahead for the nation. the way ahead cannot be a war. it needs to be a resolution. thinking about it during the conflict is responsibility. >> would you just talk about what you called progress in helmand and where you were inside and how you think helmand is going right now with the government. i know there's been a lot of problems. also, you referred in your opening remarks to the other parts of the country. can you give a little more detail on that? >> i focus most on the helmand river valley. it's of course a rich agricultural area. it's also an area that had extensive taliban for a number of years now in 2005 and 2006. some of the areas that marjah were under complete taliban control. when we did starting last july
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is put additional forces into selected area along the helmand river valley. we expanded those areas with a move west into the marjah areas. the intent to create security bubbles or security zones that increasingly expand until they are contiguous. so a farmer, for example, in the south can raise crops in the south and drive up to kandahar where we could sell those in pakistan. we are growing those areas and that is continuing pace. i'm happy with the progress of that. i've walked through marjah a number of times. i was in several time last year and several times since, the change is stark.
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if you go every day, each day, it's not a dramatic change. if you go months difference, then it is. but a counterinsurgency effort is long term. because i described it's a process, not an event. when we come into the area and start to make the change in the security situation, we start to help the afghans bring governance, it's halting and challenging in an area where there's been capacity before, it's hard. and to convince the people is even harder. because they watch the change in security, they watch the beginnings of governance, and beginnings of development. and they have to -- as i put in my statement, they have to see it to believe it. they can't just see it once. they have to see it until they believe it's durable and real. and i walked through and talked to countless groups and individuals, i'm convinced that absolutely what they want. but they remain to be convinced.
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so i think that that is the challenge over time. it's really a government of afghanistan challenge with our help. they must convince the people they have to ability to deliver and in the political will to follow through. >> you talked in the beginning about kandahar, you said is not controlled by the taliban. but i'm confused about that. because we keep hearing that the taliban certainly do move as will through the city and through the egress and in and out of the town. so what is your assessment of how much they control and let it be force that you believe you will be facing in that region. how strong have they been stockpiling weapons? you've given them plenty of advance notice. >> they certainly do not control kandahar city. they can contest on kandahar and so there's not sufficient security in kandahar city. but the taliban do not control
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the city. you can walk around the streets in kandahar. there's business going on. it's a functioning city. it's not at the level of security that makes people feel comfortable. ultimately, that's going to be critical. i can't give you number of insurgence in and around the city, but they are contesting in various levels to the north and west and south. and that is more classic counterinsurgency where in some cases they have reinforced and in some cases they have brought in additional weapons, some cases we see additional fighters move in. we are working through those with our afghan partners. there is some up close difficult fighting that occurs. and local performance in the part of our security forces. but that's going to be a difficult fight as we go forward. i'm absolutely confident that we are moving forward. i already see progress in it. because i've been up and spent the night in air gap da a week
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ago. i see and feel that, but it's a process that will take time. >> could you walk down the street in kandahar? >> i just walked down the street a week ago. david petraeus and i. he's more popular. but we did. >> i know you've had a lot of talks in pakistanis, have you asked for extra pakistan help to make sure as you move into more districts, they are not going to be going across the border to pakistan. on that note, after your operations in helmand, the taliban have returned in the ports of intimidation and even beheading of local people that work you with. is that your intelligence? >> yeah, it's absolutely things that we see. but it's predictable. as the counterinsurgency force
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moves out insurgence, they are trying to undermine when they did. they can't control marjah like they did before, raise the flag, but they can try to convince the people they are not secure, murders, night letters, taxation, they can try to send the message this won't last. the coalition will leave, the government of afghanistan will leave. this gets to the heart of us making incredible performance over time to convince the people. so i expect that they will contest this as long as they can. i expect them to contest it for months creditably and then i expect them to try to contest it after that in any way that they can. there will always be some indications of insecurity. but increasingly, security will get better and better. the school is open in marjah. the high school. that has been closed for years. so things that you don't take -- you don't focus on but change the minds of the people over
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time are key. in order to see general, i coordinate with him often. we have a solid relationship. we do coordinate our campaigns together. we will talk about what one can do to help the other. our subordinate commanders do that well, in general rodriguez,. is it perfect? no. but it's two difficult campaigns. i'm really happy with that that is going. >> when you say taliban is not in control, what is controlling kandahar city? when you say we are not going to see day operation in kandahar, how do you explain what we heard in the past two days that we are facing? do you see competition between those two pictures? >> not at all. i think the u.s. military would love to find an enemy that was
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in our peace -- piece of terrain and establish with those civilians around. that would play to every strength. what is difficult for the coalition and for the government of afghanistan is to deal with a more insidious threat, that's the insurgency. to have to go into areas where civilians are living their lives and try to protect them their without destroying their property, without unintentionally causing harm to them. but at the same time, trying to root out the insurgents that threaten them. it's a difficult challenge and unique challenge. >> is what we are facing in kandahar going to be easier than marjah? >> i didn't say easier. i actually said this is a very difficult challenge. the governance and political part is different. it's difficult to convince
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people that things have changed. you have to produce things that they see and feel over time. i think that's part of the challenge of the government of afghanistan faces. we as security forces face being very precease and very careful to try to do what we can a rising tide of security without lapsing into major fighting. insurgents would love to see a major blast of fight in an area like that. >> yes, you are not using the word of operation. i know the afghanis are sensitive about that word. but it's started. when you went to president karzai, he said nothing is going to start until you give your consent. is there still some -- >> we'll leave this recorded event now to take i live to the u.s. senate where members return to work on the financial regulations bill after a short recession. live coverage on c-span2.
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the consequences of those spills and not the american taxpayer. not small business owners, not states or the federal governme government. for some time now, we have been told by big oil companies that what's happening in the gulf simply couldn't happen, that it was impossible, that multiple redundant safety systems were in place to prevent it. well, we've threarnd there is no such thing as -- well, we've learned that there is no such thing as too safe not to spill. supposedly, the unthinkable has happened, and not only that, but it has happened before. just last year in australia, the montera oil spill began on august 21. by some estimates, the spill sent over 80,000 gallons of oil a day into the waters off the
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coast of australia. and it was months before they could staunch the flow of oil and it resulted in one of the largest environmental disasters in australian history. we should have learned from that experience, but, no, we have the challenge before the nation today. in comparison, the deepwater well that is leaking in the gulf is sending nearly 210,000 gallons of oil a day into the gulf, over twice the flow from the australian spill, several million gallons already. and just like the australian spill, it could take months to drill the relief well. two disasters in one year, yet big oil companies say over and over again that the technology was simply so safe, a spill like this could never happen.
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the reality is much different than industry claims. there simply is no safety system too safe to fail and no rig that is too safe not to spill. there is no doubt that the damages that will be caused by this spill will be enormous. unfortunately, federal law sets a $75 million limit on how much an oil company has to pay for damages. not the cleanup, that they clearly are going to have to pay, but for the damages. so b.p. would not have to pay more than a total of $75 million to small businesses for lost revenues from fishing, tourism, damage to the environment, the coastline or the lost tax revenues of state and local governments. that's why i, along with senators nelson and lautenberg, have introduced "the big oil bailout prevention act," to raise the liability cap for offshore oil well spills from $75 million to $10 billion.
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that will make sure that taxpayers, small business owners, states and local and federal governments will not bail out big oil polluters for this spill or any other. so this spill should serve as a raleighing cry for oil -- reallying cry for holding -- a a rallying cry for holding big oil responsible for disasters or any future ones. but it should also be a rallying cry to make us think about expanding offshore oil drilling to places which are not already open to oil drilling, like my home state of new jersey. instead of expanding drilling and doubling down on 19th century fuels, we should be investing in a new 21st century green economy that will create thousands of new jobs, billions in new wealth and help protect our air and water from pollution. we'll revisit that debate soon enough, but for now i think we should all be able to agree that
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when an oil company causes damage by spilling oil into american waters, the oil company bears the responsibility to pay for the damage that it caused. my mom taught me growing up that when you mess up, you clean up and you're responsible for it. oil companies should get that message as well. this will help make gulf communities whole and it will provide a stronger safety net for our communities along places like the new jersey shore, who are looking warily at plans for future drilling along the east coast. with that, mr. president, in a moment i plan to ask consent on this issue, but first i want to yield to my other colleagues who are here who want to speak on this issue. i want to yield five minutes to senator lautenberg and then five minutes to senator nelson who i know is here as well. senator lautenberg. mr. lautenberg: i thank -- the presiding officer: the senator from new jersey. mr. lautenberg: thank you. thank you, mr. chairman -- mr. president. the -- i thank my colleague for
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initiation of this bill. it will protect the american taxpayers and say to big oil, you did it, you pay for it. that's the way it goes. i grew up, i was lucky, i had two lifetime experiences that have stayed with me. one was growing up in a blue-collar family where we worried almost daily about how we'd pay our bills. my father was sick for 13 months before he died at age 43 and we owed everybody: the pharmacist, the hospitals, the doctors, no insurance, no protection for the average person. and then i was fortunate enough to be able to be engaged in a business with two other fellow as that had success beyond the wildest dreams. the company now that we started with now has 46,000 employees in 26 countries headquartered in new jersey, of course. and i learned something in those
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experiences. i learned that if you fouled up, you were responsible for cleaning up, as mentioned by senator menendez. and the american people want those responsible for doing dirt to clean up that mess, just like families do in their own lives. but the oil executives and their lobbyists don't see things that way. they want to continue gouging the public who they have by the tank and by the throat. they want to continue to accrue billion-dollar profit gains after year -- year after year and leave the american family, the average american family stretching daily to pay their bills. look at this. the profits of the big oil companies in the last quarter alone are so astounding they're almost unimaginable. b.p. had a $5.6 billion profit quarter, a gain of $3.2 billion
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over last year, when america's still in some significant economic problems. exowner, jusexxon, just by way , had a $6.3 billion profit quarter. it goes again beyond the wildest imagination. mr. president, we have to draw the line. our bill bailout prevention act would raise the damage cap for all oil spills from a measly, a pittance $75 million -- you just heard me. we compared it to a $5.2 billion quarter, not a year, a quarter, and they want to hide behind a $75 million cap on damages. well, fortunately we are here to say to the average working family, no, we're not going to let them get away with your money, we're not going to let them get away with walking away from this, hiding very gently
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behind that ridiculous cap. it could be called, in the vernacular, a spit in the ocean, $75 million. and so we can't afford to let those companies bail out, especially when workers' lives are at stake, the gulf environment hangs in the balance, and coastal communities are at risk. and i challenge my colleagues, especially those who are on the other side of the aisle, have had a habit of saying no. you want to say no to the taxpayers, say it out loud. say it out loud. but don't try to protect the oil companies who are stuffing profits so -- so much that they're gorging themselves on it. they're like pigs at the trough. and so, mr. president, the united states has seen too many oil spills, more than any other country in the world. it's time to end the special favors for big oil, get on the side of the american people and make sure that when a
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catastrophe occurs, american -- american taxpayers don't get the bill for the oil companies' carelessness, recklessness. with that, i yield the floor. a senator: mr. president? the presiding officer: the senator from florida is recognized. mr. nelson: mr. president, if this gusher continues -- and we hope and pray that by some miracle there is going to be some capping at the seabed of this well that is spewing at least 5,000 barrels of oil a day -- but if this thing continues and it doesn't stop until they get the relief well, which is another three months. one coming from one side, one coming from the other side -- another three months. it's going to cover up the gulf coast.
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and as soon as the winds shift from the north coming south, it's going to take that big spill about 90 miles to the south where the loop current is, which is a current that comes up the west side of the gulf of mexico off the yucatan peninsula into the northern gulf of mexi mexico. and because of the rotation of the earth, it causes it to come around to the east and then flow south. and that loop current comes right around the florida keys and becomes the gulf stream. it hugs the florida keys and the southeast coast of florida. and when i say hug it, i mean right off the coast, all the way up to the middle of the peninsula of florida at fort
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pierce, and there it leaves the coast just a little bit but follows the coast all the way up to cape hatteras, north caroli carolina, where it leaves the coast of the united states, goes across the atlantic to scotland. it's the old gulf stream that the spanish galions used to catch going back to europe from their discoveries in the new world. now, come back to the winds shifting. the winds shift from the north coming south, it brings that spill down to the loop current. last weekend, i had testimony by ocean specialists from the university of miami that said that once that oil gets in the loop current, it will be at the florida keys in ten days. 85% of the live coral reefs of
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the united states are in the florida keys. the gulf stream goes right by those delicate coral reefs. the gulf stream comes up and goes right by miami, key biscayne, fort lauderdale, west palm beach and as far north as fort pierce is only about 10 miles offshore. can you imagine what this is going to do in economic damages? now, we've been furniture thus far that the winds have been from the east to the west. fortunate for florida, unfortunate for louisiana, because that oil is all off those delicate bays, estuaries where so much of the gulf of mexico marine life is spawned.
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but sooner or later, mr. president, the winds are going to shift and they're going to go from the west to the east and it's going to take that oil down there off the world's most beautiful beaches and those bays and estuaries where so of marine life is spawned that happens to be off of florida. let me tell you what the president of the hotel and restaurant association told me two days ago. this is the hotel and restaurant association of florida. he said he had called a number of the hotels on the northwest gulf coast of florida. this is the beginning of their season. he said normally they would be 85% occupied now. their occupancy is 18%.
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can you imagine the economic impact of this? well, what about the economic impact of the lost sales tax to the state and local governments, the counties and the cities, who if they don't have all of these tourists coming to the beach, they're not buying things, there's less revenue coming into the states? you start to see the picture of the enormous economic damage, well over and above the cost of the cleanup. that's why an artificial figure of $75 million cap is so artificially low, and i'm not sure $10 billion is going to be enough on the cap. but it was a target. let's hope it never gets to
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that, but thus far nothing has worked because those backup safety systems did not work. the presiding officer: the senator's time has expired. mr. nelson: thank you, mr. president. the presiding officer: the senator from new jersey. mr. menendez: mr. president, in view of the fierce urgency of now, there's harm already being levied upon these communities -- commercial fishermen, tourism and others -- and because $75 million cap is less than $1 a day of b.p. profits, i ask unanimous consent that the environment and public works committee be discharged from further consideration of s. 3305, the big oil bailout prevention liability act of 2010, and that the senate proceed to its consideration, that the bill be read three times, passed, and the motion to reconsider be laid on the table. the presiding officer: is there objection? ms. murkowski: mr. president? the presiding officer: the senator from alaska. ms. murkowski: mr. president, reserving the right to object -- the presiding officer: objection is noted -- the
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senator from alaska. ms. murkowski: thank you, mr. president. i do reserve the right to object, and i'd like to take just a few minutes here this afternoon to explain why i will be objecting to this unanimous consent request. now, i've sat and listened to my three colleagues here and i have great empathy for the concern that you share. i share it as well. i represent a state that was devastated about 20 years ago -- a little more than 20 years ago when the exxon valdez hit the rocks. we lived with oil on our beaches. we know the economic impact. we know the social economic that a spill can cause. and we want to all be working together to ensure that whether it's the devastation that you see in your hotels in florida or whether it is -- it is the loss to the fishermen, that we ensure -- that we ensure that those
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that are responsible pay for the economic loss, for the damages that are incurred. we're with you on this. but the reason i stand and object at this point in time is i don't believe that taking the amount of the cap, if you will, the liability cap from $75 million, where it is currently, to $10 billion in strict liability, 133 times the size of the current strict liability limit, is where we need to be right now. and i'm not just the only one that suggests that maybe we need to understand a little bit better as to how much we might need to look at raising the limit. the administration just yesterday in their oil spill
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legislative package have proposed an effort -- their proposal as a state would raise the cap liability for the responsibility parties. the administration looks forward to working with congress to develop levels for the various caps that provide for substantial and proportional increases. if the senator will just allow me just a couple minutes to conclude this i would be happy to yield the floor. i do think that we need to look at the liability cap and consider raising it. but i think we need to be careful about unintended consequences, of picking a number -- $10 billion. let me just outline what i'm talking about when i say "unintended consequences." this has been named "the big oil bailout prevention liability act." but i think you've got some irony here in that what this would do is give all of america's offshore oil resources
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to the biggest of big oil. it would be impossible or perhaps close to impossible for any energy company that is smaller than the supermajors, smaller than the national oil companies, to operate in the o.c.s. $10 billion in strict liability would preclude their ability to obtain financing, to obtain the bonds, or insurance for any exploration. and look at who is producing in the offshore? it's the independents. they produce two-thirds of natural gas, one-third of the oil. so if we move forward with this in raising this liability cap to $10 billion, the only companies that are going to be ail to self-insure against this level of strict liability are the national oil companies, the supermajors -- and we all know who they are -- they're the saudi, aramco, and of course
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british petroleum. but it's been mentioned a couple of different times now that we need to ensure that b.p. as the responsible party pays, and the comment has been made, well, $75 million just is not going to be sufficient. i think what people need to remember is that $75 million -- the cap on the strict liability only applies to what the responsible parties have to pay back in the context of o.p.a. -- the oil pollution afnlgt the law expressly allows for unlimited damages. you've got unlimited damages in state courts where the compensatory, the punitive damages are already being sawvment as we speak sought. as we speak, the louisiana shrimpers filed a class action lawsuit against b.p., transocean, halliburton and cameron for their economic losses and alleging negligence and seeking both economic and
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punitive damages. i think state of florida on may 10 announced they filed a suit against b.p. on may 12, the fishermen filed another such lawsuit in mississippi, recognizing that again they have the ability to go after unlimited damages in those forums. so again, mr. president, i am open to raising the liability cap, but we've got both a directive from the white house and the american people -- who i believe still support offshore drilling -- we need to adjust these liability caps in a way that doesn't give the biggest oil companies a monopoly over the entire o.c. svment with that, mr. president, i would object to the unanimous consent at this time. the presiding officer: objection is heard. the senator from new jersey. mr. menendez mr. menendez: des mr. president, i i understand we're in -- what is the present business before the senate? the presiding officer: we're now supposed to turn to the sessions amendment.
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mr. menendez: is that by order? the presiding officer: it is by order. mr. menendez: well, mr. president, is debate on the sessionsessions amendment now available? the presiding officer: there's five minutes of debate in order on the sessions amendment followed by the vote. who yields time? mr. sessions: mr. president? the presiding officer: the senator from alabama. mr. sessions: i would ask consent -- i think this has been discussed on both sides -- that we have up to 30 minutes equally divided on this amendment before the vote. the presiding officer: is there objection? mr. menendez: reserving the right to object -- i'm not inclined to but what is the request? 30 minutes instead of five minutes apiece? the presiding officer: 30 minutes equally divided. is there objection?
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without objection, so ordered. mr. menendez: if the senator from alabama would yield for a moment, since i chose not to object, would you allow me to take two minutes of our time just to follow the sequence of the previous discussion so i won't interrupt the essence of your amendment? mr. sessions: i have no objection, mr. president. mr. menendez: thank you. i appreciate my distinguished cleesmght and i appreciate what my colleague from alaska had to say, but here's a couple of problems with that. if the proposition is that, first of all, when we call these independent drirls -- some of these independent drirls that are portrayed as small mom and pop -- some are like $20 billion companies, so they're not quite the mom and pop view we have of small mom and pop is abouts. number two, and if you drill, you need to be able to pay for the damages because imagine in this particular spill had been done by a -- quote, unquote --
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"small company," what would happen? just because they were too small? the risk has been has to be calculated here. what i would also say is i have a problem saying that the administration didn't say $10 billion is not the right figure, by any stretch of the imagination. ite on the contrary. they have said that they're for lifting the liability cap. now, when b.p. makes $5.6 billion in three months, when the top five companies make $25 billion in three months, $10 billion is a drop in the bucket. and, finally, the suggestion that those who are harmed, the fisher mn, the commercial fishermen, the tourism companies and others, urmtly will be in a -- ultimately be in a position to stake claims in court, well, i know my colleague from alaska knows that what happened in the exxon valdez, it took 20 years for claimants to try to get their just response. and some of them fell off the
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way because they just couldn't keep hanging in there and they lost everything. i don't want americans to have to wait 20 years to get their response to what an oil company did. and lifting the liability cap takes care of that circumstance, so you don't have to litigate in state courts and then go all the way to the supreme court and get turned down at the end of the day. the presiding officer: the senator's time has expired. mr. sessions: mr. president? the presiding officer: the senator from alabama is recognized. mr. sessions: mr. president, i appreciate the efforts of those who've worked on this financial responsibility bill. i want to say, however, i do not believe they have reached a successful conclusion, one that's principled and lawful, in
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describing and mandating how a company that can't pay its bills should be dissolved. throughout america, hundreds of thousands of businesses every day who are unable to pay their bills seek protection, as they often call it, in bankruptcy, all the claims against the company are stayed, the bankruptcy judge skilled in these matters in an open, public hearing with witnesses under oath, determines whether or not the company has a realistic chance to survive and helps structure the bankruptcy reorganization so it can survive, or it determines that the company is unable to survive. it's unlike little that they could pay off -- it's unlikely that they could pay off their creditors and most likely would only add to the debt, and they close the company down. this is law in america, since virtually the founding of the
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republic. it's something that's principled, well-settled as to how it occurs. this legislation, in a sense, institutionalizes the tarp process and next time they won't have to come to congress as they did the last time over how to dissolve some big company. they'll have too much power, in my view, in a sealed proceeding, not public, not under oath, too much like the last time when the secretary of the treasury meets in private meetings with bankers and doles out billions -- billions and billions of dollars, puts $100 billion, $80 billion in an insurance agency, a.i.g. rs al, all without any at baccountability, all without any oversight, all without the kind of integrity that is in the essence of the american legal system.
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so i'm concerned about it. my amendment would say -- it would make bankruptcy more useable for large, complex cases that have derivatives in it. it would allow the cases to be brought in large bankruptcy court areas so that there's sufficient expertise and personnel to handle it. and it would deal with the problem of derivatives that some have raised and give the courts more flexibility to do that. i think it's the better approach. it's our historic, fair approach. the american people will know it's the same judgment that falls on them and their small businesses will fall on the big boys. so, mr. president, i appreciate the opportunity to make these brief remarks. i see senator corker and senator kyl here and would be glad to yield time to them. mr. corker: mr. president? the presiding officer: the senator from tennessee is recognized. mr. corker: mr. president, i
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thank you. i want to thank my colleague from alabama for the work that he's done in trying to craft a bankruptcy title that more fully suits financial institutions. this body's an interesting body because you don't have the chance to do anything but vote "yes" or "no" on particular pieces of legislation. a couple weeks ago, or just last week the republicans -- all republicans -- had a filibuster while they waited for the leaders on each side of the banking committee to reach a compromise. and it was supported, i think, 94 or 96-1. and that compromise was on title 2, the orderly liquidation title. and so, here we have an amendment that basically is to strike something that this body, in essence, adopted 96-0.
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i spent a lot of time on that title myself, working with mark warner. i appreciate greatly the partnership that we had working on a resolution title. i thank senator shelby and senator dodd for the work that they did to try to improve that title. and we held out on this side until that occurred. now we have a vote, the sessions vote, that would strike that. mr. president, i want to say i'm at the point in this bill where i'm under no illusion that this bill is going to get any better. i know there's a lot of messaging amendments that will begin to take place. many of us will have the opportunity through our votes to express how we may feel about certain aspects of this bill. mr. president, when senator warner and i were working on a resolution, it was with the intent that bankruptcy be the default. that would be the place where
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almost every financial institution would go, and that may be that rare instance -- that rare instance -- was necessary due to some systemic risk. it was our hope that the judiciary committee would actually develop a title that would allow that to happen, but what's happened is that did not tack place. -- did not take place. as a matter of fact, many of the judicial reviews senator warner and i wanted to see place in the resolution title did not occur. there's no judicial review of payments by the fdic, those things we would like to see, sofrt rule of law -- sort of the rule of law -- at least that i would like to see. mr. president, what happened is we developed a resolution title that was to be used only very rarely because we had hoped that a bankruptcy title would be developed that financial companies would go into, but that hasn't happened. so what does that mean? that means it's far more likely -- far more likely --
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that the resolution title would actually be used instead of bankruptcy. the fact is i'm under no illusion that senator sessions' amendment is going to pass. as a matter of fact, i doubt very seriously that this amendment is going to pass. my intent to vote for the sessions amendment is not meant, is not meant to say that i disavow the work that senator shelby and senator dodd did. it's not to disavow the work that senator warner and i spent a great deal of time wedlocking on. it's to say -- a great deal of time working on. it's to say i do believe we have done the work necessary to make sure there was a bankruptcy title done that would work for financial institutions. that has not been done. and i want to thank senator sessions for giving us the opportunity to voice the fact that we believe the bankruptcy code in this country should be made so that it works far better for financial institutions. i would like for this to have
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been melded a little differently than the way the senator is putting it forth. but i want to thank him for his work and signify my intent to support him on his amendment on the basis in the fact that this bill the way it's been crafted should have respected judicial review more than it has been. and secondly, that we should have, as part of this thoughtful process, we should have done something in this bill to greatly expand the ability of the judicial system to deal with a large, highly complex financial company. i yield the floor. the presiding officer: the senator from arizona is recognized. mr. kyl: thank you, mr. president. i want to echo the sentiments of senator sessions and senator corker. they have given a great deal of thought to the problems here. these are not political issues that capture the imagination of either the newspaper or the american people. but they are really, really important, and they are both working to solve a difficult problem in a very reasonable way
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that recognizes the importance of the rule of law. one of the great distinguishing characteristics of the united states versus some other countries, many other countries in the world is that we follow a rule of law. and it makes commercial dealings, and, therefore, expansion of our economy so much easier when everyone knows what the rules are and they can plan based upon those rules. one of the bodies of law that is most contributory to that is our bankruptcy code. for over a couple of centuries we've had a process and a set of rules that govern what happens when businesses can't pay their debts and have to go out of business or be be reorganized. those rules, in effect, set the rule of the road, the things that people can count on both at the time that a business gets into trouble, but also far before that when people are making decisions on whether to lend to or invest in a business. they know, for example, if they're going to be a secured
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creditor of the business, that in the event something goes wrong, they'll be quite high on the list of businesses that get paid. if they're an unsecured creditor, they're going to be lower on that list. they'll probably get more for their lending but they'll be lower on the list. people can calibrate the kind of equity investment or lending that they want to engage in based upon what they know the rules will be in the event something goes wrong. if you do away with that and just say in the event things go wrong, a government bureaucracy -- and i don't use that word pejoratively, but a group of government employees in an agency are going to decide that something needs to be done and decide what that is. and it's basically unconstrained by any set of rules and practices such as the bankruptcy code has provided. that's scary to folks. it's going to mean that we'll have less lending and capital formation for businesses because they're going to be uncertain about the rules of the road.
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and, secondly, it's going to create potential for unfairness and, frankly, poor decisions if companies do have to get unwound. so what we're giving up here by not adopting an amendment like the sessions amendment is certainty, predictability and really decades of understanding of what the law is in the event something like this occurs. what senator corker has said is also true that these financial institutions may present some very unique circumstances. some of them may be so large and so potentially advocating of other institution -- potentially effecting of other institutions that it may be the relatively slow pace of bankruptcy, that we may need something more quickly to intervene and ensure that whatever happens with this particular business, it doesn't adversely affect others or that there may be other reasons to have a more immediate infusion of some intervention; i'll just
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put it that way. it was for that reason that all of us supported the dodd-shelby kpwroeupls. our -- compromise. our view was it's better than the underlying bill. i don't think it satisfies the three of us that it went far enough in creating these rules of predictability. the sessions amendment, as has been described, does that. i think senator corker has it exactly right. we're under no illusion that this is going to replace the dodd-shelby compromise. and in that respect, we have to just hope that in the further process of legislating on this bill that that compromise can be informed by additional debate and discussion and maybe improved. and by supporting the bankruptcy-related amendment of senator sessions, what we're trying to do is to send the message that we compliment dodd and shelby for -- senators dodd and shelby for what they did, but a little more dose of the predictability and certainty and
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judicial process of bankruptcy would be very welcomed in this process. and, therefore, to the extent that we can have a good vote on this amendment, perhaps they and others will look to other ways in which they can continue to modify this language for the very best result that we can achieve. this is a very important issue. it deserves our very best attention. and i just really want to compliment again both senator sessions and senator corker to the -- two of the very thoughtful members of this body for the way they approached this issue without any political consideration, simply to make this process better and simpler, therefore to make it better for the businesses involved and for the economy of the united states. mr. sessions: how much time is left on this side? the presiding officer: a minute and 55 seconds. mr. sessions: mr. president, i just want to share a few things briefly before we move into the vote. william crystal today raised a fundamental question in a blog
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site in which he said the way this bill is written -- that's my words -- quote -- "this is a power grab" -- his words." this is a jaunt power grab for the fdic and treasury, who could use their new powers to tug the strings of our country's largest financial institutions like a puppeteer." i would offer that for the record. i would also offer a letter of april 12 from the judicial conference of the united states. this is a thoughtful letter in response to patrick leahy, the judiciary committee chairman's inquiry in which they express grave concerns about the legislation. among other things, the judicial conference says -- quote -- "the legislation does not envision" -- that's the legislation before us -- "objection, participation, or input from the bankruptcy creditors whose rights will be
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affected in the course of appointing the f.d.i. receiver. indeed, the legislation proposes to deal with this petition in a sealed manner. only the secretary and the affected financial firm would be noticed and given opportunity of a hearing." i think that's insufficient and would offer that for the record. and finally today i received a letter from a number of superb and well-known economists and leaders: daniel duffey, dean whitter, distinguished professor of graduate school of business standard; tom jackson, distinguished university, university of rochester. the presiding officer: the time of the senator has expired. mr. sessions: -- and would offer this into the record. mr. president, i ask for 30 additional seconds. the presiding officer: without objection, so ordered. mr. sessions: -- they put forth in detail their concerns about this procedure and point
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out why bankruptcy is necessary, because that, the rule of law applies and the process is mortifying. and it's the appropriate way, they tell us with much care, of why this, my amendment would be the best way to solve this problem. i thank the chair. i would yield the floor. a senator: mr. president? the presiding officer: the senator from connecticut. mr. dodd: mr. president, how much time stphraeupls. the presiding officer: 12 minutes and 50 seconds. mr. dodd: i'll just take a few minutes. i spoke last evening about my friend's amendment. it wasn't to a packed chamber, i can tell you, about 8:00 last night. i'm sure you all received copies of it and listened to it intently as you were dozing off last evening. let me, first of all, thank jeff sessions, my good pal from alabama. we worked to together on a numbr of issues. i see bob corker on the floor as
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well. as many -- in many ways bob corker and mark warner of virginia spent a lot of hours putting this together. here's the quandary. one of the things we tried to avoid was getting back to too big to fail. the issue was -- and the presumption of our bill is bankruptcy. we want to get people in bankruptcy who want to be there. if they deserve to fail, they ought to fail. the question is if you end up with large, highly complex entities, that pushing them into bankruptcy can have the unintended collateral effect of affecting otherwise solvent, good companies, that are well-run, employing a lot of people, doing a good job. when these highly complex entities are shoved into bankruptcy, other companies can suffer. i'm shorthanding this in a wait a minute the idea was on some rare occasions -- and hopefully they're very rare -- when that
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possibility occurs and you have to go through a number of hoops to get to that conclusion, that we have the mechanism for a resolution, a winding down of that entity, to avoid the kind of collateral damage that could cause a bankruptcy with the only option for those complex entities. what you're faced with here if the sessions amendment is adopted is right back where we were in the fall of 2008, where the choices are bankruptcy or bailout, in a sense. and where bankruptcy would pose, as lehman brothers potentially did, as we saw, about a collateral damage, because there wasn't a winddown resolution mechanism. whether or not it should have been used, that's not the point of making my case, but let's say a lehman-like situation, that company ought to be put out of its misery. to go through bankruptcy would have the collateral effect of taking a lot of other people with it who don't deserve to go
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down, not to mention the jobs and the impact on the economy. senator corker and senator warner listened to a lot of people, and no one knows if you get this exactly right -- we had exactly right what we want to do. we know what we want the outcome to be, whether or not it's exactly right as planned, we won't know until it is put in place. at the b absence of that, mr. president, we're right back we're were. if there's -- if i had to pick and said to me, what's the most critical part of this bill? that's someone to ask who are has been involved in a lot here. if you said i'm only going to let you keep one section of this bill and you could only keep one thing, this is what i would keep. this exposed the taxpayer to t the $070 billion check that they had to write. we didn't have -- hopefully they rarely come and there were a lot of events that led up to it that
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we tried to deal with in this bill as well including the underwriting standards to minimize ever getting to that point where you have to make that decision. we've all been around long enough to know they can happen. when they happen again, what's our answer? well, we had an option out there, but we got rid of it. america, you have to make a choice. a lot of other people are going to suffer unnecessarily, but bankruptcy is the only choice to go. you look back and say, why didn't we put in place some alternative mechanism in the rarest occasions when some alternative other than bankruptcy should be in place. that's the conversation of a lot of talk over a lot of months. chairman leahy oppose the amendment and, again, i don't want the other members of the committee may agree with senator sessions. i'm going to suggest this isn't in -- i think what we've done here, mr. president, and this is about as critical as it gets on this bill. i say to my colleagues, there are a lot of amendments being
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offered, frankly, i might be against them or for them, if they're included or excluded, i might be disappointed one way or the other, if we get rid of this, i don't know how i could in good conscience look the american taxpayer in the eye and say that we have not protected you against too big to fail. i would urge the rejection of the session amendment and i say that respectfully, mr. president, to my good friend. i yield back the balance of my time. the presiding officer: the question is on the amendment -- mr. corker: would the senator yield a couple of minutes over here. i know we're under time anyway. mr. dodd: fine. good. go ahead. i'll ask for unanimous consent to consider yielding back my time, let me yield two minutes to my friend from tennessee. the presiding officer: the senator from tennessee. mr. corker: i thank you. i know i've spent a great deal
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of time on the floor. i think the senator from connecticut, first of all, i want to thank you for the work you did to make the title resolution better. i know after you and senator shelby finished, i thank you and expressed concern that many of the judicial reviews that i felt like were important were not included and, yet, the bill was better and i thank you for that. i realize, as i said that day on the floor, nothing ever works out exactly the way you wish. is this -- this bill isn't going to be exactly the way you wish. we're going to pass a bill that, to me, is going to be incomplete. one of the things that all of us, including you, would hope that would he could cure is that the judiciary committee would work on a title that would make the resolution title much less necessary because it would enhance the ability to deal with these complex financial companies. that has not happened. and so i know we haven't dealt with freddie and fannie in this bill. i know you would have liked to
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have dealt with that. you're not -- you're going to be leaving this body and after a distinguished career here. but i think what we're trying to say is that, look, we still have work to do. the judiciary committee has got to develop a better bankruptcy title for financial companies. and i think all scholars have said that's the case. i think that there's no question we have to deal with freddie and fannie. we will do that soon, i hope. but whatever -- i know the outcome of this. you know what the outcome of this is going to be. i think there are a number of us that would just like to see us really focus on this bankruptcy title so what you just said is exactly right and that is resolution is only used rarely -- rarely, but right now the way the bankruptcy code is, it's going to be used in every case -- in every case one of these -- when one of these large companies fails because we haven't done the work that we need to do to make the
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bankruptcy code work. the presiding officer: the senator's time has expired. mr. dodd: 30 more seconds. the presiding officer: the senator from connecticut. mr. dodd: and that is, with smaller entities, they should go to bankruptcy and that may happen. we're talking about very complex interconnected ones. my colleague is correct, and we did try, not the fault of the judiciary committee, they've been overwhelmed with judicial nominations and everything else. the present bankruptcy process does pose an issue with the large complex entities for the very reason i outlined. and, therefore, you need some mechanism because the alternative is bailout, i would presume rather than have a lot of companies fail with a lot of unemployment and damage to the overall economy. there is a step that has to be worked on. i don't -- g.s.e.'s needs to be reformed. this juncture to strip out this, it hurls us right back. so my concern here is not -- what else needs to be done down the road. but if you strip this out at
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this juncture, we leave ourselves very vulnerable. senator shelby and i worked we tried to fill in a lot of the gaps that people had, we got rid of the prepayment issue that people had concerns about and it is a post payment system and all of the issues that we tried to resolve. i appreciate the comments of my colleague's comments from tennessee. i ask forhe yeas and nays. the presiding officer: is there a sufficient second? there appears to be. the clerk will call the roll. vote:
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the presiding officer: are there any senators in th in the chambr wishing to vote or change their vote? if not, the yeas are 42, the nays are 58. the amendment is not agreed to. mrs. murray: mr. president? the presiding officer: the senator from washington. mrs. murray: mr. president, i ask unanimous consent for eight minutes. the presiding officer: order in the chamber. the senate is not in orderment mrs. murray: mr. president, i ask unanimous consent for eight minutes equally divided between myself and senator cantwell in morning business. the presiding officer: without objection. without objection. mrs. murray: thank you, mr. president. mr. president, i come to the floor today to commemorate and celebrate the lives of seven police officers from my home state of washington who lost their lives in service to their communities last year.
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mr. president, the senate is not in order. the presiding officer: the senate is not in order. please take your conversations outside the well. mrs. murray murray: thank you, mr. president. i am very proud t to join today with senator cantwell during national police week to introduce the washington state national law enforcement resolution to extend the condolences of this senate to the families, loved ones and communities of our state's fallen heroes. this week, tens of thousands of people from across our country are going to be gathering at the national law enforcement officers memorial here in washington, d.c. friends and families of fallen officers, ordinary citizens, elected officials, and fellow police officers. they're going to be joining together in the heart of our city in a tree-lined park
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splashed with daffodils and lined with two conserving blue-gray marble walls. and on these walls, these pathways of remembrance are engraved the names of federal, state, and local law enforcement officers who have made the ultimate sacrifice for the safety and protection of our nation and its people. 18,600 of them dating back to the 18th century. mr. president, among those crowds at that memorial this week are going to be men and women from my home state of washington who've flown all the way across our country to be here as seven new names are unveiled and carved into the marble and preserved for our nation to honor. seven officers from washington state who have lost their lives last year in the line of duty: deputy sheriff steven michael gallaga jr. of lewis county sheriff's office. officer timothy brenton of the seattlpolice department.
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officer teen that griswold of the police department. officer ronald will lard owens ii of the lakewood police department. sergeant mark joseph rincher of the lakewood police department. officer gregory james richards of the lakewood police department. and deputy sheriff walter kent mendell of the pierce county sheriff's department. the presiding officer: the senate is not in order. mrs. murray: mr. president, these seven remarkable and selfless officers represented the best of their communities. they were seven heroes who served proudly as a brave boundary between civil society and the worst elements of lawlessness and unrest. seven husbands, wives, fathers, and mothers whose losses have devastated families and torn apart communities. and whose deaths have weighed heavily on every member of our state's law enforcement community. each of these tragedies sheds new light on the enormity of the sacrifice police officers make
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every day in washington state and across the country. i know our officers feel this weight but i have no doubt they will never let it stop them from continuing to put themselves in harm's way in order to serve our communities. that is a testament to the commitment they make to serve and protect us. it's an oath they honor each day and it's a reminder to all of us that these brave men and women deserve every ounce of support we can provide to keep them sa safe. so, mr. president, it was with great pride that i introduce the washington state law enforcement memorial resolution to commemorate and celebrate the lives of those seven officers. my thoughts and prayers continue to be with their families and i join their communities, washington state, and the entire nation in gratitude for their service. thank you, mr. president. and i yield to my colleague from washington state, senator cantwell. ms. cantwell: mr. president? the presiding officer: the senator from washington. ms. cantwell: mr. president, i want to thank my colleague, senator murray, for her leadership in having this resolution on the floor today.
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she is always focused on those who are on the sphront line of defense in our -- frontline of defense in our country and clearly in washington state, and i appreciate her leadership in honoring the fallen officers from washington state. this week, as she said, does mark national police week, where officers from across the nation will travel here to honor their fallen comrades. and because we in washington state have done so much of this lately, we understand how important this type of activity is for remembering the men and women who serve us. during this week, we will reflect on their brave activities and their ultimate sacrifices to our community. 2009 was one of the deadliest years in washington state in more than 70 years. seven officers were killed in the line of duty. these heroes put their lives at risk for our safety and they will be missed but they will not be forgotten. the men and women in blue keep our communities safe and they do so at tremendous sacrifices.
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deputy mike gallagher from lewis county was -- his car was strowk his way back from respond -- struck on his way back from responding to a domestic violence incident. timothy britton from seattle was shot while sitting in his car on halloween in seattle. we thought those two incidents were enough to rock our community. but then in one of the most heinous murders in the state of washington history, four lakewood police officers were shot and killed while on duty in parkland. sergeant mark renneger, officer ronald owens, officer teen that griswold, and officer greg richards. it was just a short time later that deputy kent mundell of pierce county sheriff's office died from wounds sustained in responding to a domestic violence call. so we have seen in washington state the sacrifice of these men and women, all that they do to keep us safe and all that their families go through when those who are in the line of duty pay
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the ultimate sacrifice. so, mr. president, i hope our colleagues will also remember the law enforcement across our country and in their individual states. i hope they will take this time as they see the officers here in the capital and throughout the washington, d.c. area and at home to thank them for their service. let's commemorate the activities of those who have fallen and also remember those who are still working to protect us every single day. again, i thank my colleague from washington for this resolution and i hope for its urgent passage today. mr. burris con. mr. president? the presiding officer burris: me senator from illinois. mr. burr choice know i ask unanimous consent to speak for five minutes as in morning business. the presiding officer: without objection. mr. burris: thank you, mr. president. in 1933, a 16-year-old young lady named lena horne joined the chorus at a famous club in
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harlem known as the cotton club. this young lady was passionate about performing so she jumped in with both feet and she never looked back. the following year, lena horne made her debut on broadway. not long after, she became the first african-american performer to sign a long-term contract with the big hollywood studio m.g.m. she blazed a trail, mr. president, she knew that her talent could outshine the ugliness of racial prejudice, so in the 1940's, she became a major movie star. but despite her success lena horne never forget her roots or the plight of those who are subjected to hatred and bigry on a daily basis. she knew that she was a role model and had a -- and had an
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authority figure and she used her fame as a platform to raise these issues and to fight against intolerance. she partnered with the first lady, eleanor roosevelt, to pass antilynching legislation after the second world war, and she worked with the japanese-americans who had suffered internment and discrimination and all the while a star was on the rise. in 1957, she recorded -- and i quote -- "lena horne at the waldorf astoria" an album that would become the best selling album in the history of r.c.a. she add to with famous leaders like dr. king on the famous march on washing dispofnlt she spoke out against racial inequality and became involved with the naacp and other groups. and she never stopped doing what she loved and that was performing, mr. president.
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in 1981, she returned to broadway in a one-woman show which won a tony award, two grammies and endless -- grammies and endless critical acclaim, and she kept creating original material well into the next decade. mr. president, lena horne departed this life only a few days ago, may 9, at the age of 92. as a performer, her legacy is unsurpassed. she rose to become one of the most successful entertainers of the last century and blazed a trail for countless other minority performers to follow. her personal legacy is also -- is no less remarkable. she consistently lived out her values and did not shy away from opportunities to stand up for what she believed in. she embraced every chance to make a positive difference in the lives of others and that, mr. president, more than anything else is what she will be remembered for.
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mr. president, lena horne left an indelible mark on this nati nation. that's why i'm proud to join senator gillibrand in sponsoring a resolution in her honor. i ask that my colleagues stand with us in celebrating the life of this remarkable woman, a trail blazer who achieved great success in the face of tall odds and then used that success to better the lives of other. lena horne is gone, mr. president, but in her classic recordings and in the lives she touched, the movies she made and the changes she helped to bring about, she will always be with us. thank you, mr. president, and i yield the floor. and i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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quorum call:
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mr. burris: mr. president? the presiding officer: the senator from illinois. mr. burris: i ask unanimous consent that the quorum call being rescinded. the presiding officer: without objection. mr. burris: thank you, mr. president. in recent days since the chamber opened debate on the chairman dodd financial reform bill, we've all heard a lot of talk about the irresponsible behavior on wall street. we've heard about the recklessness and the -- that cost this country trillions of dollars in lost savings, not to mention 8 million american jobs. we've heard about the consumers, especially the minority population and the elderly who have suffered a great deal as a result of this economic crisis.
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and, mr. president, i thank my colleagues on both sides of the aisle for joining in the debate about how to address these issues. and i'm confident that we can reach and find exron ground. just -- common ground. just yesterday i came to the floor to voice my strong support for the consumer financial protection bureau that would be created under chairman dodd's bill. i believe this bureau would be at the heart of any reform legislation, to end abusive practices, serve as an advocate for ordinary americans, and make every -- make sure everybody can get a fir deal. it would -- a fair deal t would even help to prevent a similar financial crisis from taking place in the future, mr. president but we need to make sure our bill is about more than prevention. we need to be proactive about finding solutions for millions of americans, especially minority individuals, who are
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hurting right now. and we need to start by expanding access to credit. under the dodd bill, the secretary of treasury would be authorized to establish a multiyear program of cooperative agreements, financial agency agreements, and grants, all disienled to make credit more available for low- and middle-income americans. for the first time in years, our legislation would give ordinary consumers access to mainstream financial institutions and provide alternatives to these payday loan operations. it would help defray the cost of programs that make small loans so folks could find it easier to get resources they need without incurring unnecessary risk. a consumer financial protection bureau would also play a significant role in making credit more available. currently, 16% of minority households do not have bank
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accounts compared with only 4% of the white households. as a result, african-americans and other minorities are more likely to use payday lending services, some of which are questionable practices, to take advantage of their customers. that is why about -- that is why our consumer financial protection bureau would have the authority to supervise large, nonbank financial companies to cut down on abusive tactics. it would also help us enforce fair credit card laws, rein in the automatic overdraft payments and the complex web of rate charges. in short, mr. president, this legislation would reduce or eliminate many of the factors that keep people away from banks. it would help raise financial literacy and establish reasonable terms and conditions for loans. at its core, it would
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significantly expand access to credit, especially among those who continue to feel the worst effect of this economic crisis. that i didn't mean proud to support the wall street reform bill that has been introduced by my good friend, the distinguished chairman from connecticut, chairman dodd. i urge my colleagues to join me in passing this important legislation. thank you, mr. president. i yield the floor. and, mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mr. dodd: mr. president? the presiding officer: the senator from connecticut. mr. dodd: mr. president, aid ask consent that the call of the quorum be dispensed with. the presiding officer: without objection. mr. dodd: mr. president, i'd ask consent that the pending ale be set aside and that we call up senator wyden's amendment number 4019, and senator thune amendment number 3887 -- 3987. the presiding officer: without objection. the clerk will report. the clerk: the senator from connecticut, mr. dodd, for mr. wyden and others proposes amendment numbered 4019 to amendment number 3739. mr. dodd proposes amendment 3987 to amendment 3739.
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mr. dodd: senator, do you want to be heard on your amendment? mr. wyden: yes. mr. president, thank you very much. and let me particularly express my appreciation to the chairman of the full committee, senator dodd. he's been extraordinarily patient and especially with the large bipartisan coalition that has come together behind this amendment to ensure that finally the secret hold in the united states senate, one of the most powerful tools that a senator has here in the senate, is no longer. mr. president, you have done very good work on this issue, along with a number of colleagues on both sides of the aisle, and the reason we feel so strongly is because the secret hold in the united states senate is an indefensible violation of the public's right to know. we all understand, every time we're home in our states, how
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frustrated people are with the way business is done in washington, d.c. one way to send a message that we're going to start doing business differently is to throw open the doors of government and to make sure that nominations and legislation that's important gets debated in public and people actually get to see the give-and-take of colleagues on both sides of the aisle, democrats and republicans, that is essential to making good policy. now, most americans have no idea what a secret hold is, and i have said on many occasions that my guess is, a lot of them think that this is some kind of haircentury or something. but the fact of the matter -- haircentury or something. but the fact of the matter is, this is an extraordinarily tool that senators have to affect the lives of our people, and it ought to be something that is exposed to public scrutiny and public accountability.
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when asked why ro he robs banks, willie sutton said, that's where the money is. the secret holds is where the power is. what our bipartisan group has said is that it is wrong for a senator to block a piece of legislation or a nomination in secret by simply telling the leader of their party of their desire. what this has meant -- and there have been scores and scores of these secret holds in recent years, mr. president -- is that one person, without any public disclosure whatever, can keep the american people from even getting a small peak at wha pees public business. that's not right and it is time to eliminate public holds. in 2007, senators on both sides of the aisle sought to finally bring some sunlight to this practice. senator grassley, the distinguished senator from iowa,
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and i have worked on this for over a decade. unfortunately, a number of loopholes have been developed since that provision was accepted, and today too much senate business is done in the dark, unaccountable and away from public scrutiny and public exposure. this amendment closes the loopholes, and it is going to be enforced. with this approach, every hold, every single hold, is going to have a public owner within two days. and i want to close just briefly by describing how this would work. under this proposal, if a united states senator puts a hold on a bill or a nomination, they are required to submit a written notice in the "congressional record" within two days. when that bill or nomination comes to the floor and any senator objects to its consideration on the grounds of a hold, one of two things is
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going to happen. either the senator placing the secret hold is going to have their name publicly released or the senator who objected on their behalf is going to own that hold. that senator will own it. their name is going to be published in the congressional calendar. so for the first time after all of these months and months of debate about secret holds in the senate, there's going to be public pressure and there would be peer pressure on those who try to do senate business behind closed doors. two last points with respect to reforms included in this amendment. the proposal eliminates the ability that a senator has to lift a hold before the current six-day period expires and never have it disclosed. mr. president, you and i have talked a bit about this matter,
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of resrofrlg holds and the -- revolving holds and the six-day period. this has been a huge abuse. it allows a senator to do business in secret and never have a proposal. with this new -- never have a disclosure. if the senate has a hold even for a minute, the hold will be disclosed. with the six-daytime period, a group of senators can pass a hold from one colleague to another and never have it discussed. by requiring all holds to be made public, it will be much more difficult to find new senators to place revolving holds. last point, mr. president, it seems to me that in addition to taking a step that the country feels very strongly about, which is doing more public business in public, this is being done in a bipartisan way. this is being done in a way that
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can bring democrats and republicans together, a way that doesn't involve a lot of finger pointing. and i want to just mention a number of colleagues that the president in the senate -- the distinguished senator from virginia has had many constructive conversations with me about this. senator inhofe, senator collins joined senator grassley. senator inhofe has been talking about this issue with me and others for almost a decade as well. senator bennett, senator merkley, senator whitehouse, all of these senators, a large bipartisan group, comes together to urge the passage of this amendment. i want to single out two, though, for a particular commendation. we wouldn't be on this floor today had not the senator from missouri, senator mccaskill, prosecuted this cause relentlessly. she has brought to light a number of holds. when we've talked about it,
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she's made the point that this is going on on both sides of the aisle. she deserves great credit for this today. let me also thank senator coburn, dr. coburn of oklahoma. he has been very involved in reform issues for many years. we're looking forward to an additional reform that he's going to be advancing, that i look forward to sponsoring. and i wrap up only by way of trying to highlight that after the senate has spent a lot of time discussing secret holds over the last few months, on a bipartisan basis the senate comes together today with an approach that has actually brought senators together, is going to ensure that every single secret hold is going to have an owner. that's going to be a big change. it is high time the public deserves to have public business actually done in public. and with the adoption of this amendment, that will be done.
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mr. president, the chairman of the full committee has been very, very gracious to me. i would like to ask for the yeas and nays at this time. if i could engage the chairman -- if i could engage the chairman of the full committee in a colloquy? you have been very, very helpful with respect to scheduling this. mr. chairman, is it your pleasure that now having debated this, we set it aside for a vote later in the day? mr. dodd: my pleasure is that we get to vote on the wyden-grassley amendment. so whenever that can occur, i'm for it. we can do it right now; i'm for it now. mr. wyden: i'm ready to go to the yeas and nays, mr. president. i would ask for the yeas and nays. mr. president, i would withdraw that request. i thank the chairman --
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mr. dodd: it's not my sole decision. mr. wyden: the chairman of the full committee has been very, very patient with us on it. he's done an extraordinary amount of work on this. let us, with that request, hold off on the yeas and nays on this. i would ask the chairman that it be scheduled for the yeas and nays with the next group. mr. dodd: i can say -- mr. president, i say to my colleague from oregon that i expect momentarily we'll work out some time agreements on this and we can schedule a vote on this fairly quickly. mr. wyden: i thank the chairman. mr. a senator: mr. president? the presiding officer: the senator from south dakota. mr. thune: i understand amendment 3987 has been called up by the manager of the bill. i think it's been made pending, so i would like to speak to it and hope at the appropriate time to be able to get an agreement so we can get a vote on it.
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i would ask for the yeas and nays at the completion of my remarks. this amendment, mr. president, is a very simple, straightforward; it's one paragraph long. it's not complicated. what it essentially does, it sets a sunset date for the newly created bureau of financial protection allowing congress to reevaluate the bureau after four years. now, i think that most americans, if they knew that we were creating a big new bureaucracy here in washington, d.c., mr. president, would want us to have some oversight. they would want some accountability. they would want to make sure that their tax dollars are being spent wisely and well whafplt this new -- what this new consumer protection bureau does is it will have lots of new federal employees here in washington, d.c. it will spend hundreds of millions of dollars every single year. and yet, congress has literally no oversight or authority with regard to this new bureau. and it seems to me, at least,
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that when you have a fiscal situation like we have today in this country where we're running $1 trillion deficits literally every year, where our debts are continuing to pile up to the tune of doubling our federal debt, publicly held debt in five years, tripling it in ten years, that you would want to do something to make sure that any new expenditure of taxpayer dollars are spent efficiently, effectively and that we are being as frugal as we possibly can. i, for one, would not like us to see us go down this path. i don't think that creating a huge new bureaucracy here in washington, d.c. is necessary. i think you can address the issue of consumer protection, you can do it through existing agencies and authorities that are out there. and, frankly, i would like to see this particular title in this legislation go away entirely. but it doesn't look like that's going to happen. we offered an amendment here earlier this week that would have been a substitute for this
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consumer protection title in the bill and addressed it in what we think is a more reasonable way, but that was voted down. and so, what my amendment simply does is it says this: it says four years from now, once this bureau has been created, let's have it sunset. and then if necessary, congress can come back and reauthorize it. congress then would have an opportunity to fine-tune it perhaps. congress would have an opportunity to look and see if it's performing the function it was intended to perform, whether it's doing it in an efficient and cost-effective way. clearly we have a responsibility, i think, to the american taxpayer to have some accounting with this new bureaucracy we're going to create as a result of this legislation. and so it's straightforward, mr. president. we have other agencies of government that we do this with, that we sunset, that we reauthorize. we just did that with the cftc. that's an agency that was reauthorized during the farm bill last year.
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when we did that, we were able to fine-tune its mission. it also gives you an opportunity to reorganize an agency if you have to go through a reauthorization process and sunset process. so i don't think it's asking too much, when you're talking about literally hundreds of millions of dollars annually and what would appear to be thousands of new federal employees in this new agency, and what would also appear to be incredibly broad and vast new powers and authorities that will be unchecked. because there isn't any accountability to the congress. congress is not going to appropriate annually as we do with most agencies the power of the purse. this is all going to be run through the federal reserve. and yet it is taxpayer dollars that are at risk here. it is taxpayer dollars that are being used to finance this new bureaucracy. so, mr. president, i would hope that my colleagues would be able to find their way to support this amendment. i think it's a reasonable approach, and i don't think it's, again, asking too much
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when the american taxpayers who are paying the bills every year for this government and having to deal with the burden of debt that we're piling on them because of the spending that's going on here in washington -- and of course if you look at what we're spending this year and what we spent last year in the federal government, much of it was borrowed. out of all the spending last year, about 43 cents out of every dollar that we spent last year was borrowed. this year it's about 39 cents out of every dollar. when you're running those kinds of deficits, piling up that kind of debt, when you've got this kind of spending going on in washington and the fiscal problems that we have as a nation, it makes perfect sense to me and i think it makes perfect sense to the american taxpayer to say if you're going to create a huge new bureaucracy, which, as i said before is not something i believe is necessary, but nonetheless if it's going to happen in this legislation, let's relook at this four years from now. let's allow it to sunset and force us to go through a process where we reauthorize it, where
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we reevaluate and review and see if this is functioning in the way it was intended and see whether these vast new powers and authority created by this bureaucracy is really what the american people want to see happen. one final point i'll make, mr. president, and that is there are lots of entities out there other than banks that are worried about this particular title in the bill. because of the rule making authority that exists, you have auto dealers, you have had jewelry, businesses, you've had furniture stores, you've had argt done teufts, -- orthodontists, lots of small businesses concerned they are going to be reached by these agencies with broad new authorities and very little accountability by the congress. that is a concern of a lot of small businesses to whom we look to create the jobs and hopefully initiate an economic recovery in this country and get the economy back on track. this in fact could put lots of new burdens, lots of new band-aids, lots of new costs on
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many of these small businesses. that is another reason why i believe this is a bad idea in the first place, but at a minimum, we ought to allow it to sunset so we have an opportunity to review it and reevaluate it and make some decisions regard to its future four years from now. it's very straightforward. it's one paragraph long. sunset the bureau of consumer financial protection and allow congress to reevaluate that bureau after four years. i hope my colleagues will support this amendment. mr. president, i will ask for the yeas and nays and would hope at the appropriate time we'll be able to have a recorded vote. i yield the floor. the presiding officer: is there a sufficient second? at this moment there is not a sufficient second. there is a sufficient second. mr. durbin: mr. president? the presiding officer: the senator from illinois. mr. durbin: mr. president, i'm hoping that later this afternoon there will be a unanimous
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consent request that relates to an amendment which i've introduced, amendment number 3989. i'd like to take a few minutes now, since there's no one else seeking recognition on the floor, to describe this amendment in the hopes that when it comes up later, we can move to it very quickly and to a vote very quickly as well. i've spoken on the floor of the senate several times about the amendment because it is complicated in one respect. this amendment is, relates to the fees charged by credit card companies like visa and master card to the retailers and businesses that accept the credit cards. so, if you are a customer of a shop and when you purchase something, you present the credit card, there are two transactions taking place at least. one transaction is between you and your credit card company because you put the credit card out there and you have to pay the bill later on. and the other transaction relates to the business, the shop that accepts your credit
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card. by accepting the credit card, they also accept an obligation to pay the credit card company or the bank issuing the credit card. it's called an interchange fee. there's another one called a swipe fee. so, the credit card company is getting paid both ways. they get paid by the customers who pay interest on outstanding balances on the credit cards. and they get paid by the retail establishments that accept the credit cards. and so, the credit card companies have a lucrative business going on both sides of the transaction. this amendment that i'm talking about relates not to you as a customer owning a credit card, but rather to the shop or retail establishment that accepts the credit card. what is a reasonable amount for them to pay? there are two types of credit cards, two major types of credit cards. one is a credit card, and the other is a debit card. a credit card is basically that. you are buying on credit with the promise to pay when your
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monthly bill comes around. the debit card is different because it takes the money directly out of your checking account an gives it to the shop owner. they're different in that in one there is more risk because people may not pay their credit card balance at the end of the month. they may not pay it at all, so risk is associated with it. in the other there is very little, if any risk. if there's no money in the checking account, it won't be paid to the shop owner. it's a simple transaction like writing a check to the bank and the bank honoring the check. my bill addresses the interchange fee, the am paid by the retail establishment to the credit card company. the two major credit cards in america are visa and mastercard, they account for over 80% of the credit card companies in the united states. there are others, discover, american express, and others. but the two, visa and mastercard
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with the two big kids on the block. they have established the legal arrangements with the businesses that accept their credit cards. it is those legal arrangements that we're questioning with this amendment that i'm going to propose later in the day. this amendment that i offer would help small businesses, merchants and consumers by providing relief for high interchange fees for debit card transactions. we are focusing on debit card transactions, those are the one with much less, if any, risk involved in them. here on the senate floor we're working on a bill to keep the big banks from rigging the system that hurts the shops on main street. if we're going to look at the rigged financial systems that hurt businesses, we have to improve debit and card industries. credit and debit cards are replacing cash and checks in the economy. there are over one billion debit
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cards in the united states. three billion people and a million credit and debit cards. last year americans conducte conducted $1.7 trillion in transactions on credit cards. $1.6 trillion on debit cards, which are becoming more and more popular. credit an debit cards are used in more than half of the retail sales in the united states of america. yes, being able to pay with plastic is a great convenience, but there's another reality. the shift from cash and checks to credit and debit means that the that we do business in america is increasingly falling under the control of these two giants of the credit and debit card industry, visa and mastercard. these card networks dominate the credit and debit card industries, as i mentioned earlier, they're used in 80% of all such transactions. unfortunately these two companies are looking for profits and they're not always looking out for the best interest of the merchants, the
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small businesses, and the retail businesses or the consumers. interchange fees are classic example. a lot of people in congress don't want me to bring up this issue. they have told me this is the wrong bill to talk about it. i think not. i tried to bring it up under credit card reform, and they said, no, searntd durbin, that's the wrong bill. now i want to bring it up under the financial stability act, they say, no, it's the wrong bill. i don't think there is a right bill with an issue that is this couldn'controversial and comple. we should address it and vote on it. visa and mastercard require an interchange fee every time a person uses the credit. the fees are 1% to 12% of the transaction. visa and mastercard charge interchange fees to the merchants, but instead of keeping the money, they pass the money to the banks that issue
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the visa and master cards. why do they do this? some for banks conducting the cost of the transaction, most of it is to induce banks to issue more visa and master cards. $50 billion in interchange tbrees collected in 2008, with 80% of that money going to 10 of the largest banks in america. 80% of it. the card issuing banks use this interchange revenue to pay for ads, to offer rewards, issue more cards, and not surprisingly, the revenue also helps banks make large profits and give bonuses to their c.e.o.'s. banks love the money and they love the current interchange system. as interchange fees go up, it means the banks get more money to issue more cards an increase their profits. rising interchange fees benefit visa and mastercard. it means more cards will be issued and with each card comes
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another fee called a network fee every time the card suesed. what a great system. as long as interchange fees are increasing, both the card networks and the banks couldn't be happier. but the troubling thing about interchange fees that they're deducted from every transaction left for the seller. this is a very different -- this is very different from cash and check systems when a business makes a cash sell, it gets full payment in hand and the federal reserve requires the checks clear at their full-face value. so $100 sale by cash or check is a $100 sale. but when a business makes a $100 sale by credit or debit card, the banks and their card networks take a cut. the business may end up with only $98 out of $100 on the debit card. maybe less. the business is getting shortchanged the actual face value of the transaction. so to make up for interchange fees, businesses are forced to
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raise their prices, cut back on expenses or something like that. they may even cut back in employees to keep up with these interchange fees. in a normal market, you'd see banks competing with one another to do business with the restaurants and the shops and the merchants. and with that competition, things would be a lot better. but, in fact, the real world of credit cards with the two clients, visa ands mastercard is a world with little or no competition. madam president, the credit and debit card markets are not normal. visa and mastercard set key freehs that apply to all banks within their card networks. there is no negotiation between the -- notion with the banks and merchants over charging interchange rates, businesses in new hampshire and illinois and across america have no bargaining power with these giant credit card companies. they set the rules, fix the fees, take it or leave it. visa and mastercard have every
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incentive to raise the interchange fees, it will make it more likely that banks will issue more cards. what can businesses do to stop the rising interchange fees? almost nothing. some, very rarely, some businesses say we don't accept credit or debit cards, but the vast overwhelming majority of businesses do, they have to. it's part of doing business in america. so visa and mastercard have 80% of the debit and credit market. merchants have to use them. they tell the merchants, if you want to take our cards, you live with the fees we charge. not the competitive situation at all. this isn't really sustainable. if left alone, it's going to get worse for small business that's face higher fees for consumers who pay higher prices and for everyone but the bank and credit card networks. here's the most unbelievable part, businesses in every other country in the world get a better interchange deal from vista and mastercard than businesses in the united states of america. i told this to someone and he said it sounds like
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pharmaceutical drugs where you can buy the u.s. pharmaceutical drugs more cheaply in canada, mexico, and europe. it's the american consumers paying more. same thing is true when it comes to visa and mastercard. they charge american businesses higher interchange fees than they charge businesses around the world. visa and mastercard already charge the highest interchange rates in the world to american businesses and the rates keep going up. there was a g.a.o. report last year that found that visa and mastercard -- listen to this -- had voluntarily reduced the interchange fees on businesses in other countries. just last month visa voluntarily lowered many of its european debit rates by 60%, unilaterally lowered them by 60%. what happened in the united states? they raised the fees on american businesses trying to fight their way out of this recession by
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30%. these huge credit card companies had some sympathy for europe, but not for america. that's unacceptable. and we can do something about it and that's why i introduced this amendment. the amendment requires that debit card interchange fees be reasonable and proportion mal. i don't pick a number. i don't set a fee. we want to make sure that they're proportional and reasonable to the cost in the transaction. credit card transactions are different from a debit card transaction. in a debit card transaction, you deduct money from the bank account and that's why debit cards are often advertised as bank cards, as check cards. right now in the united states, there are zero transaction fees deducted when you use a check. the federal reserve does not allow transaction fees to be chargeled for checks. but when it comes to debit cards, visa and mastercard charge high interchange fees just like they do for credit. why?
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because they can get away with it. there's no regulation, there's no law, there's no one holding them accountable. an estimated $20 billion was collected from businesses and consumers across america in debit interchange fees last year, $20 billion, and that money comes from the bottom line of every small business in every town in america that accepts payments by debit card. my amendment will bring some reasonableness to the system. it tells the federal reserve to ensure that debit fees are reasonable and proportional to costs and not just a way of generating huge profits at the expense of small business. if we can reduce debit interchange fees to a reasonable level, it will be like a tax break on every debit card sale a merchant makes. think how much that will help small businesses on main street. one of my colleagues said, but even if the businesses saved money and don't have to pay more to the credit cards, what makes you think they're going to give the consumers a break with it?
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they may just take it in profits. well, they can. there's no way to police that. but i just had a press conference with the national association of convenience stores. we know them as the small shop on the corner that has some groceries and maybe candy bars and slurpies or whatever you want to stop and buy, but it also turns out these convenience stores sell 82% of the gasoline sold in america. they're part of statement association. and i said to the man who ran the association, so what guarantee do we have if we reduce the amount that you have to pay the credit card companies that the consumers will feel it? he said, well for our business, we're the only business that posts prices right out on the sidewalk for all of the motorists to see of our most popular item, gasoline. we fight for pennies. if we can reduce it a penny or two a gallon, we'll attract more customers. if we can save more money in the interchange fees, it puts us in
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a more competitive position to sell more gasoline. that's one side of the argument. it could be to the benefit of consumers. there are no guarantees, but at least in the world i'm talking about, you get to shop around. as a customer, you pick the convenience store, you pick the grocery store, you pick the prices. when it comes to the owners of the stores using credit cards, they don't get to shop. they get a take it or leave it are from visa or mastercard and have no bargaining power whatsoever. many senators are worried about community banks that also issue credit cards. if there's one thing i've heard over and over from my colleagues is we don't want to hurt small-town banks, regional banks, banks that are not the big boys on wall street that issue credit cards. that's why i amended my amendment. and i said we will exempt all banks with less than $10 billion in assets. $10 billion. now, i would just say that if you have more than $10 billion
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in associates, it would be hard to call you a community bank. you're a much bigger operation. under my amendment visa and mastercard can continue to set the same debit interchange rates that they do today for small banks and credit unions. 99% of banks, 99% of credit unions have assets of less than $10 billion. of all the credit unions in the united states, only three have associates over $10 billion. one of my colleagues said, i'm really close to the credit unions. well, i would say to my colleague, i'm sure you're also close to the small businesses in your state. and in this situation 99% of the credit unions, virtually every credit union in your state will be exempt from your law, but your small businesses may benefit from it because the largest banks have the largest impact on the credit interchange fees. my amendment would -- the ones
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that issue the vast majority of debit cards and get the vast majority of interchange fees to a reasonable fee requirement. i hear the so-called independent community banks of america oppose my amendment. i couldn't understand it. if i exempted banks with less than $10 billion, that would exempt 99.8% of all of the so-called community banks in america. why do they still oppose it? well, i've learned why. the independent community bank association, itself, is a major issuer of credit and debit cards. they are one of the top 25 credit card issuers in the united states and are the 23 largest debit card issuer. they make a lot of money off of interchange fees. they do not have clean hands in this debate. they are, in fact, conflicted in this debate. they are not arguing on behalf of small banks. sadly, they're arguing on behalf of their own association, their
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trade association's credit cards, and the fact that they receive these generous interchange fees. icba, so-called independent community bankers association, profits from the unfair swipe-free system like the biggest banks in america today. that's a conflict of interest. is this washington trade association really representing small banks who would get higher interchange fees than the big banks under my amendment, or is it just interested in protecting its own revenue stream? i called back to some of my friends in illinois, down state illinois where i come from, small town america, small city america. i talked to them about this. i said i'm exempting banks with assets of less than $10 billion. and they said to me, well, that's perfectly reasonable. it's not going to touch any banks that you know, community banks that you know in down state illinois. that's an indication to me that this trade association out here is not speaking, really speaking for community banks when they say they oppose this amendment as amended. my amendment also aims to make
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sure that visa and mastercard can't block merchants from offering discounts to their customers. for example, visa has a provision in its contract with all the businesses who accept it that they cannot offer -- the business cannot offer a customer a discount to use a competing credit card like a mastercard. mastercard has a similar provision, so they are protecting one another. you can't say, for example, that your shop prefers visa cards because visa card charges you less as a business. they prohibit that back and forth. and some people say well, maybe that's okay. would it be okay if we take it to the next example? it's like coca-cola saying that a store can sell coke but only if they agree not to sell pepsi at a lower price. it's like pepsi saying the same thing. who loses in that deal? i can tell you who loses. the customer, because there is no competition, and the business because they don't attract the
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customers with competition and lower prices. now translate that into credit cards. that's what visa and mastercard are doing today. my amendment strips these provisions from visa and mastercard's contracts so merchants could offer discounts without penalty. my amendment would also allow merchants to offer discounts for customers who pay by cash, check or debate card as opposed to credit cards. sometimes visa and mastercard threaten to fine merchants who offer discounts for these cheaper forms of payment. my amendment would end those threats once and for all. this type of effort to promote noncompetitive practices should not be allowed and my amendment would bring it to an end. nothing in my amendment would allow merchants to discriminate against cards issued by small banks or credit unions. that was another comment. they said listen, durbin, if your amendment passes, then they are going to say this establishment will not accept credit cards from a small bank that issues these cards. we make it express in the
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amendment that we're offering, that you cannot discriminate against the issuer -- that's the bank -- of a credit card. you can only say you prefer one network over another because the interchange fees on your business happen to be lower. but you can't pick out banks. you may say we prefer visa, we prefer mastercard, but you cannot pick them out by banks. interchange fees have real-life consequences on business across america. i have been receiving calls and letters from small business owners all over the state asking congress to fix this rigged interchange system. last week, my office received pegz signed by 92,000 illinois consumers seeking to reform credit and debit interchange fees. the amendment has also been endorsed by 203 national and state trade associations representing every type of business you can think of and it's been endorsed by americans for finance reform, a coalition of over 250 consumers, civil rights, labor, retiree and business groups.
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if you talk to visa or mastercard or the biggest banks, all you will hear is how well the current system is working and how we ought to keep our hands off of it, but if you talk to the local grocery store owner or the person who owns the local restaurant in your hometown or the man who owns the gas station or the family that runs a local diner, small businesses and merchants across america let them tell you the story about dealing with visa and mastercard and what it's meant to them in their business. this afternoon, art potash who owns some grocery stores in chicago came by my office. we had a little press conference. he talked about the competitiveness of the grocery business where the return is usually 1% or 2% and he ends up spending -- or paying 2% to 3% back to the credit card companies for people who use credit and debit cards. he is stuck because if he doesn't accept credit and debit cards, he is really trying to fight the tide. more and more people are using them, but he is paying a fee which is cutting right into the
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bottom line. with this interchange fee at a more reasonable level, he would be able to expand his business and hire more people. wouldn't that be a good outcome in an economy where we're desperate to deal with unemployment? lutz put main street above the big banks and credit card companies. i ask my colleagues to help me in passing this amendment. madam president, i'm going to ask unanimous consent to submit for the record some comments that i have received from merchants and businesses across the state of illinois supporting my amendment for interchange reform. i have received them from james phillip of phillips flower shops in westmont, illinois, howard jones, george ladonn. , owner of a hardware in berkeley, illinois. russ peters, owner of a printing company in mount prospect. james dames, owner of snackers cafe in western springs. george preckwinkle, a friend of mine with a hardware company
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with 10 locations in central illinois. paul taylor, owner of taylor's gift. and ratadorn, owner of the king and thai restaurant in oak park. the owner of queenie's court, a restaurant, in fort city mall in chicago. john gardett, representing 450 small businesses across the state. i ask unanimous consent that their comments and letters which they have sent me be made a part of the record at this stage in the debate. the presiding officer: without objection. mr. durbin: madam president, i see one of my colleagues on the floor here and so i'm going to yield the floor and say to my colleagues i'm hoping this amendment comes up this afternoon. i will take less time to describe it then. i wanted to use this time to put my full statement in the record. but i will just say to my colleagues, there will be another amendment we will consider this week or in the near future of such importance to small business across america. let's stand up for these small businesses and give them a fighting chance against the
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giants in the credit card industry. it's only fair and it's a good way to revive this economy and put people back to work. madam president, i yield the floor and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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a senator: madam president? the presiding officer: the senator from wisconsin. a senator: i ask that the quorum call be rescinded. the presiding officer: without objection.
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mr. kohl: madam president, i rise today to speak about amendment 3788, an amendment essential to protecting consumers. as we work to rein in the excesses of wall street and shore up our economy, we must do all that we can to ensure that consumers can get discount prices from retail stores at the very time when they need them the most. this amendment will restore the nearly century old rule that made it illegal under antitrust law for a manufacturer to set a price below which a retailer could not sell a product, a practice known as resale price maintenance or vertical price fixing. this rule was overturned in 2007 by a narrow 5-4 majority of the supreme court in the legion case. this amendment is identical to the discount pricing consumer act, a bill which has 10 cosponsors and passed the judiciary committee last month. our bill has been endorsed by 39 state attorneys general, leading consumer groups, as well as numerous antitrust experts,
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including former f.t.c. chairman pedovski. for 96 years until the legion decision, the rules were clear. manufacturers could not set a retail price and retailers could not be prevented from discounting. millions of consumers saw the benefits of discount prices every day. thousands of retailers all across our country were able to discount their products and sell their goods at the most competitive prices. many credit the ban on vertical price fixing with the rise of today's low-price discount retail giants, stores like target, best buy, wal-mart, and the internet sites amazon and ebay, which officer customers a wide -- offer customers a wide e array of products at discount prices. but the consequences of the legion case should worry us all -- worry all of us. allowing manufacturers to set retail prices threatens the very existence of discounting and discount stores and leads to
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higher prices for consumers. in his dissenting opinion in legion, justice breyer cited economic studies that have estimated that if only 10% of manufacturers engaged in retail price fixing, retail bills would average $750 to $1,000 higher for the average family of four every year. and the experience of the last three years since the legion decision is going to confirm our fears regarding the dangers of permitting vertical price fixing. the "wall street journal" has reported that more than 5,000 companies have implemented minimum pricing policies. internet monitors scour the web at the behest of manufacturers to prevent discounting, and there have been many reports of everything, from consumer electronics and video games to baby products and toys, rental cars and bathtubs being subject to minimum retail pricing policies.
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the amendment we have here is quite simple and direct. it merely returns us to the state of the law the day before legion was decided. it would simply add one sentence to section 1 of the sherman act, a statement that any agreement with a retailer, wholesaler or distributor setting a price below which a product or service cannot be sold violates the law. no balancing or protracted legal proceedings will be necessary. should a manufacturer enter into such an agreement, it will unquestionably violate antitrust law. instead of the complexity of the rule of reason announced by legion, we will once again have a simple and clear legal rule banning vertical price fixing. a legal rule that will promote low prices and discount competition to the benefit of consumers every day. in the last 15 years, millions of consumers have benefited from an explosion of retail competition from new large discounters in virtually every product, from clothing to
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electronics to groceries in both big-box stores and on the internet. this amendment will correct the supreme court's abrupt change to antitrust law and will ensure that today's vibrant, competitive retail marketplace and the savings gained by american consumers from discounting will not be jeopardized by the abolition of the ban on vertical price fixi fixing. i urge my colleagues to support this amendment. mr. kohl: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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this is a retina coming to be a retina coming to be. this is retail price is going to be a retail price. vertical price. this is a test test test.
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vertical price. this is a retina specialist. quorum call:
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mr. udall: madam president? the presiding officer: the senator from colorado. mr. udall: i ask to lift the quorum call. the presiding officer: without objection. mr. udall: i rise -- before i speak to the topic at hand, i wanted to ask unanimous consent as well that senator schumer and senator levin be added as
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original cosponsors to amendment 4016. the presiding officer: without objection. mr. udall: and i want to thank them for their support. i also would not to first thank senators lugar and bond for the efforts that they brought forth along with those on our side for this important amendment. madam president, this amendment will make if it a fact of life that individual americans can more easily access their credit score. i've come to the floor to push for an important change in the world of credit bureaus and credit reports and now credit scores. a credit score impacts consumers' interest rates, monthly payments on home loans and can affect a consumer's ability to buy a car, rent an apartment or get phone or internet service. i have been working with chairman dodd, the treasury department and the federal
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reserve and other colleagues to help us reach a compromise to achieve those objectives. i am very pleefsed to say that i think at this fairly late hour that we've aagreed to an approach that will give millions of americans unsolicited access to their genuine credit score. i have talked about the difference between a score and a report. the report is a valuable tool butless you have your score, you don't know where you stand. this bipartisan amendment -- our bipartisan amendment will build upon existing law and require disclosure of credit scores to consumers whenever their credit score is used against them. so, madam president, under our amendment, if you're turned down for credit because of your credit score -- which is not an unusual occurrence, frankly -- you have the right to see the credit score that was used against you. and under this amendment, if you're charged a higher interest rate or get less favorable terms on a loan because of your score, you will also receive
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notification of that score. so this amendment that -- again, we have bipartisan support for -- corrects one of the inequities in our financial system which keeps americans from accessing this very important tool that frankly i think is as important as your health statistics, your blood pressure, your heart rate and so on. but we haven't beenable to access that credit score. so there is a fundamental principle, a fundamental principle that's at stake here. if your credit score is being used against you, you ought to have the right to at least see it. this -- the wall street accountability package that we're considering, madam president, at the heart of it i think we -- the senator from new hampshire knows this -- we want to give americans more tools so they're more financially literal. they can take care of their financial future. so the best part of this amendment is that consumers will receive notification of their score without any redap


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